Correlation Between SBM Offshore and Beeks Trading
Can any of the company-specific risk be diversified away by investing in both SBM Offshore and Beeks Trading 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 Beeks Trading 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 Beeks Trading, you can compare the effects of market volatilities on SBM Offshore and Beeks Trading 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 Beeks Trading. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBM Offshore and Beeks Trading.
Diversification Opportunities for SBM Offshore and Beeks Trading
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SBM and Beeks is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding SBM Offshore NV and Beeks Trading in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beeks Trading 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 Beeks Trading. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beeks Trading has no effect on the direction of SBM Offshore i.e., SBM Offshore and Beeks Trading go up and down completely randomly.
Pair Corralation between SBM Offshore and Beeks Trading
Assuming the 90 days trading horizon SBM Offshore NV is expected to generate 0.68 times more return on investment than Beeks Trading. However, SBM Offshore NV is 1.48 times less risky than Beeks Trading. It trades about 0.05 of its potential returns per unit of risk. Beeks Trading is currently generating about 0.02 per unit of risk. If you would invest 1,706 in SBM Offshore NV on November 2, 2024 and sell it today you would earn a total of 82.00 from holding SBM Offshore NV or generate 4.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 96.77% |
| Values | Daily Returns |
SBM Offshore NV vs. Beeks Trading
Performance |
| Timeline |
| SBM Offshore NV |
| Beeks Trading |
SBM Offshore and Beeks Trading Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SBM Offshore and Beeks Trading
The main advantage of trading using opposite SBM Offshore and Beeks Trading positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBM Offshore position performs unexpectedly, Beeks Trading 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 Beeks Trading will offset losses from the drop in Beeks Trading's long position.| SBM Offshore vs. AcadeMedia AB | SBM Offshore vs. Ecclesiastical Insurance Office | SBM Offshore vs. Prosiebensat 1 Media | SBM Offshore vs. DFS Furniture PLC |
| Beeks Trading vs. Broadridge Financial Solutions | Beeks Trading vs. Morgan Advanced Materials | Beeks Trading vs. Sabre Insurance Group | Beeks Trading vs. EVS Broadcast Equipment |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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