Correlation Between SHIP HEALTHCARE and SBM OFFSHORE
Can any of the company-specific risk be diversified away by investing in both SHIP HEALTHCARE 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 SHIP HEALTHCARE and SBM OFFSHORE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SHIP HEALTHCARE HLDGINC and SBM OFFSHORE, you can compare the effects of market volatilities on SHIP HEALTHCARE 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 SHIP HEALTHCARE with a short position of SBM OFFSHORE. Check out your portfolio center. Please also check ongoing floating volatility patterns of SHIP HEALTHCARE and SBM OFFSHORE.
Diversification Opportunities for SHIP HEALTHCARE and SBM OFFSHORE
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SHIP and SBM is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding SHIP HEALTHCARE HLDGINC and SBM OFFSHORE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SBM OFFSHORE and SHIP HEALTHCARE 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 SHIP HEALTHCARE HLDGINC 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 SHIP HEALTHCARE i.e., SHIP HEALTHCARE and SBM OFFSHORE go up and down completely randomly.
Pair Corralation between SHIP HEALTHCARE and SBM OFFSHORE
Assuming the 90 days horizon SHIP HEALTHCARE HLDGINC is expected to generate 0.72 times more return on investment than SBM OFFSHORE. However, SHIP HEALTHCARE HLDGINC is 1.38 times less risky than SBM OFFSHORE. It trades about 0.21 of its potential returns per unit of risk. SBM OFFSHORE is currently generating about -0.08 per unit of risk. If you would invest 1,260 in SHIP HEALTHCARE HLDGINC on September 13, 2024 and sell it today you would earn a total of 80.00 from holding SHIP HEALTHCARE HLDGINC or generate 6.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SHIP HEALTHCARE HLDGINC vs. SBM OFFSHORE
Performance |
| Timeline |
| SHIP HEALTHCARE HLDGINC |
| SBM OFFSHORE |
SHIP HEALTHCARE and SBM OFFSHORE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SHIP HEALTHCARE and SBM OFFSHORE
The main advantage of trading using opposite SHIP HEALTHCARE and SBM OFFSHORE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SHIP HEALTHCARE 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.| SHIP HEALTHCARE vs. Superior Plus Corp | SHIP HEALTHCARE vs. NMI Holdings | SHIP HEALTHCARE vs. SIVERS SEMICONDUCTORS AB | SHIP HEALTHCARE vs. NorAm Drilling AS |
| SBM OFFSHORE vs. Apple Inc | SBM OFFSHORE vs. Apple Inc | SBM OFFSHORE vs. Apple Inc | SBM OFFSHORE vs. Apple Inc |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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