Correlation Between Flow Traders and SBM Offshore
Can any of the company-specific risk be diversified away by investing in both Flow Traders 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 Flow Traders and SBM Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Flow Traders NV and SBM Offshore NV, you can compare the effects of market volatilities on Flow Traders 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 Flow Traders with a short position of SBM Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flow Traders and SBM Offshore.
Diversification Opportunities for Flow Traders and SBM Offshore
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Flow and SBM is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Flow Traders NV 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 Flow Traders 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 Flow Traders NV 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 Flow Traders i.e., Flow Traders and SBM Offshore go up and down completely randomly.
Pair Corralation between Flow Traders and SBM Offshore
Assuming the 90 days trading horizon Flow Traders NV is expected to generate 0.99 times more return on investment than SBM Offshore. However, Flow Traders NV is 1.01 times less risky than SBM Offshore. It trades about 0.21 of its potential returns per unit of risk. SBM Offshore NV is currently generating about 0.05 per unit of risk. If you would invest 1,718 in Flow Traders NV on November 7, 2024 and sell it today you would earn a total of 716.00 from holding Flow Traders NV or generate 41.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Flow Traders NV vs. SBM Offshore NV
Performance |
| Timeline |
| Flow Traders NV |
| SBM Offshore NV |
Flow Traders and SBM Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flow Traders and SBM Offshore
The main advantage of trading using opposite Flow Traders and SBM Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flow Traders 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.| Flow Traders vs. Gaming Realms plc | Flow Traders vs. Worldwide Healthcare Trust | Flow Traders vs. Gaztransport et Technigaz | Flow Traders vs. Advanced Medical Solutions |
| SBM Offshore vs. Aptitude Software Group | SBM Offshore vs. Vitec Software Group | SBM Offshore vs. Liechtensteinische Landesbank AG | SBM Offshore vs. BioPharma Credit PLC |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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