Correlation Between SBM Offshore and Camellia Plc
Can any of the company-specific risk be diversified away by investing in both SBM Offshore and Camellia Plc 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 Camellia Plc 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 Camellia Plc, you can compare the effects of market volatilities on SBM Offshore and Camellia Plc 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 Camellia Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBM Offshore and Camellia Plc.
Diversification Opportunities for SBM Offshore and Camellia Plc
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between SBM and Camellia is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding SBM Offshore NV and Camellia Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Camellia 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 Camellia Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Camellia Plc has no effect on the direction of SBM Offshore i.e., SBM Offshore and Camellia Plc go up and down completely randomly.
Pair Corralation between SBM Offshore and Camellia Plc
Assuming the 90 days trading horizon SBM Offshore NV is expected to generate 1.08 times more return on investment than Camellia Plc. However, SBM Offshore is 1.08 times more volatile than Camellia Plc. It trades about 0.06 of its potential returns per unit of risk. Camellia Plc is currently generating about -0.04 per unit of risk. If you would invest 1,208 in SBM Offshore NV on September 3, 2024 and sell it today you would earn a total of 507.00 from holding SBM Offshore NV or generate 41.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.73% |
| Values | Daily Returns |
SBM Offshore NV vs. Camellia Plc
Performance |
| Timeline |
| SBM Offshore NV |
| Camellia Plc |
SBM Offshore and Camellia Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SBM Offshore and Camellia Plc
The main advantage of trading using opposite SBM Offshore and Camellia Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBM Offshore position performs unexpectedly, Camellia Plc 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 Camellia Plc will offset losses from the drop in Camellia Plc's long position.| SBM Offshore vs. Zoom Video Communications | SBM Offshore vs. Enbridge | SBM Offshore vs. Endo International PLC | SBM Offshore vs. Invesco Health Care |
| Camellia Plc vs. Pets at Home | Camellia Plc vs. SBM Offshore NV | Camellia Plc vs. Universal Music Group | Camellia Plc vs. Lindsell Train Investment |
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 Stocks Directory module to find actively traded stocks across global markets.
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