Correlation Between Food Life and SBM OFFSHORE
Can any of the company-specific risk be diversified away by investing in both Food Life 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 Food Life and SBM OFFSHORE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Food Life Companies and SBM OFFSHORE, you can compare the effects of market volatilities on Food Life 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 Food Life with a short position of SBM OFFSHORE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Food Life and SBM OFFSHORE.
Diversification Opportunities for Food Life and SBM OFFSHORE
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Food and SBM is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Food Life Companies and SBM OFFSHORE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SBM OFFSHORE and Food Life 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 Food Life Companies 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 has no effect on the direction of Food Life i.e., Food Life and SBM OFFSHORE go up and down completely randomly.
Pair Corralation between Food Life and SBM OFFSHORE
If you would invest 1,645 in SBM OFFSHORE on October 20, 2024 and sell it today you would earn a total of 160.00 from holding SBM OFFSHORE or generate 9.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Food Life Companies vs. SBM OFFSHORE
Performance |
| Timeline |
| Food Life Companies |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
| SBM OFFSHORE |
Food Life and SBM OFFSHORE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Food Life and SBM OFFSHORE
The main advantage of trading using opposite Food Life and SBM OFFSHORE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Food Life 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.| Food Life vs. Grupo Carso SAB | Food Life vs. GEELY AUTOMOBILE | Food Life vs. AOI Electronics Co | Food Life vs. STMicroelectronics NV |
| SBM OFFSHORE vs. BORR DRILLING NEW | SBM OFFSHORE vs. GLG LIFE TECH | SBM OFFSHORE vs. Bio Techne Corp | SBM OFFSHORE vs. Addtech AB |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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