Correlation Between SBM Offshore and Baillie Gifford
Can any of the company-specific risk be diversified away by investing in both SBM Offshore and Baillie Gifford 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 Baillie Gifford 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 Baillie Gifford European, you can compare the effects of market volatilities on SBM Offshore and Baillie Gifford 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 Baillie Gifford. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBM Offshore and Baillie Gifford.
Diversification Opportunities for SBM Offshore and Baillie Gifford
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between SBM and Baillie is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding SBM Offshore NV and Baillie Gifford European in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baillie Gifford European 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 Baillie Gifford. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baillie Gifford European has no effect on the direction of SBM Offshore i.e., SBM Offshore and Baillie Gifford go up and down completely randomly.
Pair Corralation between SBM Offshore and Baillie Gifford
Assuming the 90 days trading horizon SBM Offshore is expected to generate 5.8 times less return on investment than Baillie Gifford. In addition to that, SBM Offshore is 1.79 times more volatile than Baillie Gifford European. It trades about 0.02 of its total potential returns per unit of risk. Baillie Gifford European is currently generating about 0.19 per unit of volatility. If you would invest 8,359 in Baillie Gifford European on October 20, 2024 and sell it today you would earn a total of 541.00 from holding Baillie Gifford European or generate 6.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.62% |
| Values | Daily Returns |
SBM Offshore NV vs. Baillie Gifford European
Performance |
| Timeline |
| SBM Offshore NV |
| Baillie Gifford European |
SBM Offshore and Baillie Gifford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SBM Offshore and Baillie Gifford
The main advantage of trading using opposite SBM Offshore and Baillie Gifford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBM Offshore position performs unexpectedly, Baillie Gifford 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 Baillie Gifford will offset losses from the drop in Baillie Gifford's long position.| SBM Offshore vs. Ecclesiastical Insurance Office | SBM Offshore vs. Blackrock World Mining | SBM Offshore vs. Bisichi Mining PLC | SBM Offshore vs. Gear4music Plc |
| Baillie Gifford vs. EJF Investments | Baillie Gifford vs. Vietnam Enterprise Investments | Baillie Gifford vs. SBM Offshore NV | Baillie Gifford vs. Tavistock Investments 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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