Correlation Between Ams AG and SBM Offshore
Can any of the company-specific risk be diversified away by investing in both Ams AG 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 Ams AG and SBM Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ams AG and SBM Offshore NV, you can compare the effects of market volatilities on Ams AG 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 Ams AG with a short position of SBM Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ams AG and SBM Offshore.
Diversification Opportunities for Ams AG and SBM Offshore
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ams and SBM is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Ams AG 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 Ams AG 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 Ams AG 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 Ams AG i.e., Ams AG and SBM Offshore go up and down completely randomly.
Pair Corralation between Ams AG and SBM Offshore
Assuming the 90 days trading horizon Ams AG is expected to under-perform the SBM Offshore. In addition to that, Ams AG is 2.44 times more volatile than SBM Offshore NV. It trades about -0.26 of its total potential returns per unit of risk. SBM Offshore NV is currently generating about 0.02 per unit of volatility. If you would invest 1,706 in SBM Offshore NV on September 4, 2024 and sell it today you would earn a total of 9.00 from holding SBM Offshore NV or generate 0.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Ams AG vs. SBM Offshore NV
Performance |
| Timeline |
| Ams AG |
| SBM Offshore NV |
Ams AG and SBM Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ams AG and SBM Offshore
The main advantage of trading using opposite Ams AG and SBM Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ams AG 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.| Ams AG vs. SBM Offshore NV | Ams AG vs. Fortune Brands Home | Ams AG vs. Ecclesiastical Insurance Office | Ams AG vs. Cars Inc |
| SBM Offshore vs. Uber Technologies | SBM Offshore vs. Roper Technologies | SBM Offshore vs. Spirent Communications plc | SBM Offshore vs. Raytheon Technologies Corp |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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