Correlation Between Amedeo Air and SBM Offshore
Can any of the company-specific risk be diversified away by investing in both Amedeo Air 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 Amedeo Air and SBM Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amedeo Air Four and SBM Offshore NV, you can compare the effects of market volatilities on Amedeo Air 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 Amedeo Air with a short position of SBM Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amedeo Air and SBM Offshore.
Diversification Opportunities for Amedeo Air and SBM Offshore
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Amedeo and SBM is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Amedeo Air Four 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 Amedeo Air 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 Amedeo Air Four 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 Amedeo Air i.e., Amedeo Air and SBM Offshore go up and down completely randomly.
Pair Corralation between Amedeo Air and SBM Offshore
Assuming the 90 days trading horizon Amedeo Air Four is expected to generate 0.64 times more return on investment than SBM Offshore. However, Amedeo Air Four is 1.56 times less risky than SBM Offshore. It trades about 0.53 of its potential returns per unit of risk. SBM Offshore NV is currently generating about -0.34 per unit of risk. If you would invest 5,100 in Amedeo Air Four on September 20, 2024 and sell it today you would earn a total of 420.00 from holding Amedeo Air Four or generate 8.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Amedeo Air Four vs. SBM Offshore NV
Performance |
| Timeline |
| Amedeo Air Four |
| SBM Offshore NV |
Amedeo Air and SBM Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amedeo Air and SBM Offshore
The main advantage of trading using opposite Amedeo Air and SBM Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amedeo Air 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.| Amedeo Air vs. Scandic Hotels Group | Amedeo Air vs. Virgin Wines UK | Amedeo Air vs. Park Hotels Resorts | Amedeo Air vs. Fulcrum Metals PLC |
| SBM Offshore vs. Zoom Video Communications | SBM Offshore vs. Enbridge | SBM Offshore vs. Endo International PLC | SBM Offshore vs. Blue Star Capital |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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