Correlation Between SBM Offshore and Catena Media
Can any of the company-specific risk be diversified away by investing in both SBM Offshore and Catena Media at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining SBM Offshore and Catena Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SBM Offshore NV and Catena Media PLC, you can compare the effects of market volatilities on SBM Offshore and Catena Media and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in SBM Offshore with a short position of Catena Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBM Offshore and Catena Media.
Diversification Opportunities for SBM Offshore and Catena Media
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SBM and Catena is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding SBM Offshore NV and Catena Media PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catena Media PLC and SBM Offshore is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on SBM Offshore NV are associated (or correlated) with Catena Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catena Media PLC has no effect on the direction of SBM Offshore i.e., SBM Offshore and Catena Media go up and down completely randomly.
Pair Corralation between SBM Offshore and Catena Media
Assuming the 90 days trading horizon SBM Offshore NV is expected to generate 0.42 times more return on investment than Catena Media. However, SBM Offshore NV is 2.39 times less risky than Catena Media. It trades about 0.06 of its potential returns per unit of risk. Catena Media PLC is currently generating about -0.08 per unit of risk. If you would invest 1,222 in SBM Offshore NV on August 31, 2024 and sell it today you would earn a total of 493.00 from holding SBM Offshore NV or generate 40.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.74% |
| Values | Daily Returns |
SBM Offshore NV vs. Catena Media PLC
Performance |
| Timeline |
| SBM Offshore NV |
| Catena Media PLC |
SBM Offshore and Catena Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SBM Offshore and Catena Media
The main advantage of trading using opposite SBM Offshore and Catena Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBM Offshore position performs unexpectedly, Catena Media can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Catena Media will offset losses from the drop in Catena Media's long position.| SBM Offshore vs. AcadeMedia AB | SBM Offshore vs. Zinc Media Group | SBM Offshore vs. Auction Technology Group | SBM Offshore vs. Hollywood Bowl Group |
| Catena Media vs. Neometals | Catena Media vs. Coor Service Management | Catena Media vs. Aeorema Communications Plc | Catena Media vs. JLEN Environmental Assets |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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