Correlation Between SBM Offshore and Ashtead Technology
Can any of the company-specific risk be diversified away by investing in both SBM Offshore and Ashtead Technology 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 Ashtead Technology 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 Ashtead Technology Holdings, you can compare the effects of market volatilities on SBM Offshore and Ashtead Technology 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 Ashtead Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBM Offshore and Ashtead Technology.
Diversification Opportunities for SBM Offshore and Ashtead Technology
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SBM and Ashtead is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SBM Offshore NV and Ashtead Technology Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ashtead Technology 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 Ashtead Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ashtead Technology has no effect on the direction of SBM Offshore i.e., SBM Offshore and Ashtead Technology go up and down completely randomly.
Pair Corralation between SBM Offshore and Ashtead Technology
Assuming the 90 days trading horizon SBM Offshore NV is expected to generate 0.39 times more return on investment than Ashtead Technology. However, SBM Offshore NV is 2.57 times less risky than Ashtead Technology. It trades about 0.1 of its potential returns per unit of risk. Ashtead Technology Holdings is currently generating about 0.0 per unit of risk. If you would invest 1,736 in SBM Offshore NV on November 2, 2024 and sell it today you would earn a total of 52.00 from holding SBM Offshore NV or generate 3.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
SBM Offshore NV vs. Ashtead Technology Holdings
Performance |
| Timeline |
| SBM Offshore NV |
| Ashtead Technology |
SBM Offshore and Ashtead Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SBM Offshore and Ashtead Technology
The main advantage of trading using opposite SBM Offshore and Ashtead Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBM Offshore position performs unexpectedly, Ashtead Technology 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 Ashtead Technology will offset losses from the drop in Ashtead Technology's long position.| SBM Offshore vs. Ecclesiastical Insurance Office | SBM Offshore vs. bet at home AG | SBM Offshore vs. Silver Bullet Data | SBM Offshore vs. Anglo Asian Mining |
| Ashtead Technology vs. Batm Advanced Communications | Ashtead Technology vs. Pets at Home | Ashtead Technology vs. Mobile Tornado Group | Ashtead Technology vs. DFS Furniture PLC |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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