Correlation Between Veolia Environnement and SBM Offshore
Can any of the company-specific risk be diversified away by investing in both Veolia Environnement and SBM Offshore 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 Veolia Environnement and SBM Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Veolia Environnement VE and SBM Offshore NV, you can compare the effects of market volatilities on Veolia Environnement and SBM Offshore 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 Veolia Environnement with a short position of SBM Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Veolia Environnement and SBM Offshore.
Diversification Opportunities for Veolia Environnement and SBM Offshore
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Veolia and SBM is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Veolia Environnement VE and SBM Offshore NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SBM Offshore NV and Veolia Environnement 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 Veolia Environnement VE are associated (or correlated) with SBM Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SBM Offshore NV has no effect on the direction of Veolia Environnement i.e., Veolia Environnement and SBM Offshore go up and down completely randomly.
Pair Corralation between Veolia Environnement and SBM Offshore
Assuming the 90 days trading horizon Veolia Environnement is expected to generate 3.85 times less return on investment than SBM Offshore. But when comparing it to its historical volatility, Veolia Environnement VE is 1.58 times less risky than SBM Offshore. It trades about 0.04 of its potential returns per unit of risk. SBM Offshore NV is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,112 in SBM Offshore NV on August 26, 2024 and sell it today you would earn a total of 648.00 from holding SBM Offshore NV or generate 58.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.63% |
| Values | Daily Returns |
Veolia Environnement VE vs. SBM Offshore NV
Performance |
| Timeline |
| Veolia Environnement |
| SBM Offshore NV |
Veolia Environnement and SBM Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Veolia Environnement and SBM Offshore
The main advantage of trading using opposite Veolia Environnement and SBM Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Veolia Environnement position performs unexpectedly, SBM Offshore 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 SBM Offshore will offset losses from the drop in SBM Offshore's long position.| Veolia Environnement vs. SBM Offshore NV | Veolia Environnement vs. Solstad Offshore ASA | Veolia Environnement vs. Martin Marietta Materials | Veolia Environnement vs. Applied Materials |
| SBM Offshore vs. Central Asia Metals | SBM Offshore vs. MediaZest plc | SBM Offshore vs. JD Sports Fashion | SBM Offshore vs. Prosiebensat 1 Media |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
Other Complementary Tools
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |