Correlation Between SBM Offshore and Abingdon Health
Can any of the company-specific risk be diversified away by investing in both SBM Offshore and Abingdon Health 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 Abingdon Health 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 Abingdon Health Plc, you can compare the effects of market volatilities on SBM Offshore and Abingdon Health 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 Abingdon Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBM Offshore and Abingdon Health.
Diversification Opportunities for SBM Offshore and Abingdon Health
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SBM and Abingdon is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding SBM Offshore NV and Abingdon Health Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Abingdon Health 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 Abingdon Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Abingdon Health Plc has no effect on the direction of SBM Offshore i.e., SBM Offshore and Abingdon Health go up and down completely randomly.
Pair Corralation between SBM Offshore and Abingdon Health
Assuming the 90 days trading horizon SBM Offshore NV is expected to under-perform the Abingdon Health. But the stock apears to be less risky and, when comparing its historical volatility, SBM Offshore NV is 1.57 times less risky than Abingdon Health. The stock trades about -0.06 of its potential returns per unit of risk. The Abingdon Health Plc is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 750.00 in Abingdon Health Plc on September 14, 2024 and sell it today you would earn a total of 0.00 from holding Abingdon Health Plc or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SBM Offshore NV vs. Abingdon Health Plc
Performance |
| Timeline |
| SBM Offshore NV |
| Abingdon Health Plc |
SBM Offshore and Abingdon Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SBM Offshore and Abingdon Health
The main advantage of trading using opposite SBM Offshore and Abingdon Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBM Offshore position performs unexpectedly, Abingdon Health 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 Abingdon Health will offset losses from the drop in Abingdon Health's long position.| SBM Offshore vs. Made Tech Group | SBM Offshore vs. Roper Technologies | SBM Offshore vs. LPKF Laser Electronics | SBM Offshore vs. Electronic Arts |
| Abingdon Health vs. Gear4music Plc | Abingdon Health vs. BW Offshore | Abingdon Health vs. Gruppo MutuiOnline SpA | Abingdon Health vs. Medical Properties 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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