Correlation Between SBM Offshore and Amedeo Air
Can any of the company-specific risk be diversified away by investing in both SBM Offshore and Amedeo Air 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 Amedeo Air 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 Amedeo Air Four, you can compare the effects of market volatilities on SBM Offshore and Amedeo Air 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 Amedeo Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBM Offshore and Amedeo Air.
Diversification Opportunities for SBM Offshore and Amedeo Air
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between SBM and Amedeo is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding SBM Offshore NV and Amedeo Air Four in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amedeo Air Four 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 Amedeo Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amedeo Air Four has no effect on the direction of SBM Offshore i.e., SBM Offshore and Amedeo Air go up and down completely randomly.
Pair Corralation between SBM Offshore and Amedeo Air
Assuming the 90 days trading horizon SBM Offshore NV is expected to under-perform the Amedeo Air. In addition to that, SBM Offshore is 1.62 times more volatile than Amedeo Air Four. It trades about -0.37 of its total potential returns per unit of risk. Amedeo Air Four is currently generating about 0.4 per unit of volatility. If you would invest 5,270 in Amedeo Air Four on September 24, 2024 and sell it today you would earn a total of 290.00 from holding Amedeo Air Four or generate 5.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
SBM Offshore NV vs. Amedeo Air Four
Performance |
| Timeline |
| SBM Offshore NV |
| Amedeo Air Four |
SBM Offshore and Amedeo Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SBM Offshore and Amedeo Air
The main advantage of trading using opposite SBM Offshore and Amedeo Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBM Offshore position performs unexpectedly, Amedeo Air 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 Amedeo Air will offset losses from the drop in Amedeo Air's long position.| SBM Offshore vs. Oakley Capital Investments | SBM Offshore vs. Roper Technologies | SBM Offshore vs. Livermore Investments Group | SBM Offshore vs. Odyssean Investment Trust |
| Amedeo Air vs. CVR Energy | Amedeo Air vs. Viridian Therapeutics | Amedeo Air vs. Nationwide Building Society | Amedeo Air vs. Digital Realty Trust |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |