Correlation Between SBM Offshore and Europa Metals
Can any of the company-specific risk be diversified away by investing in both SBM Offshore and Europa Metals 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 Europa Metals 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 Europa Metals, you can compare the effects of market volatilities on SBM Offshore and Europa Metals 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 Europa Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBM Offshore and Europa Metals.
Diversification Opportunities for SBM Offshore and Europa Metals
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SBM and Europa is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SBM Offshore NV and Europa Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Europa Metals 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 Europa Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Europa Metals has no effect on the direction of SBM Offshore i.e., SBM Offshore and Europa Metals go up and down completely randomly.
Pair Corralation between SBM Offshore and Europa Metals
If you would invest 1,680 in SBM Offshore NV on October 28, 2024 and sell it today you would earn a total of 145.00 from holding SBM Offshore NV or generate 8.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SBM Offshore NV vs. Europa Metals
Performance |
| Timeline |
| SBM Offshore NV |
| Europa Metals |
SBM Offshore and Europa Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SBM Offshore and Europa Metals
The main advantage of trading using opposite SBM Offshore and Europa Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBM Offshore position performs unexpectedly, Europa Metals 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 Europa Metals will offset losses from the drop in Europa Metals' long position.| SBM Offshore vs. Southwest Airlines Co | SBM Offshore vs. Edinburgh Investment Trust | SBM Offshore vs. European Metals Holdings | SBM Offshore vs. First Class Metals |
| Europa Metals vs. Givaudan SA | Europa Metals vs. Antofagasta PLC | Europa Metals vs. Ferrexpo PLC | Europa Metals vs. Atalaya Mining |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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