Correlation Between Superior Plus and SBM OFFSHORE
Can any of the company-specific risk be diversified away by investing in both Superior Plus 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 Superior Plus and SBM OFFSHORE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Superior Plus Corp and SBM OFFSHORE, you can compare the effects of market volatilities on Superior Plus 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 Superior Plus with a short position of SBM OFFSHORE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Superior Plus and SBM OFFSHORE.
Diversification Opportunities for Superior Plus and SBM OFFSHORE
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Superior and SBM is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Superior Plus Corp and SBM OFFSHORE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SBM OFFSHORE and Superior Plus 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 Superior Plus Corp 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 Superior Plus i.e., Superior Plus and SBM OFFSHORE go up and down completely randomly.
Pair Corralation between Superior Plus and SBM OFFSHORE
Assuming the 90 days horizon Superior Plus Corp is expected to under-perform the SBM OFFSHORE. In addition to that, Superior Plus is 1.47 times more volatile than SBM OFFSHORE. It trades about -0.07 of its total potential returns per unit of risk. SBM OFFSHORE is currently generating about 0.08 per unit of volatility. If you would invest 1,424 in SBM OFFSHORE on September 1, 2024 and sell it today you would earn a total of 276.00 from holding SBM OFFSHORE or generate 19.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Superior Plus Corp vs. SBM OFFSHORE
Performance |
| Timeline |
| Superior Plus Corp |
| SBM OFFSHORE |
Superior Plus and SBM OFFSHORE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Superior Plus and SBM OFFSHORE
The main advantage of trading using opposite Superior Plus and SBM OFFSHORE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Superior Plus 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.| Superior Plus vs. TSOGO SUN GAMING | Superior Plus vs. FUTURE GAMING GRP | Superior Plus vs. TROPHY GAMES DEV | Superior Plus vs. Boyd Gaming |
| SBM OFFSHORE vs. SYSTEMAIR AB | SBM OFFSHORE vs. FORWARD AIR P | SBM OFFSHORE vs. Enter Air SA | SBM OFFSHORE vs. DELTA AIR LINES |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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