Correlation Between Aalberts Industries and SBM Offshore
Can any of the company-specific risk be diversified away by investing in both Aalberts Industries 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 Aalberts Industries and SBM Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aalberts Industries NV and SBM Offshore NV, you can compare the effects of market volatilities on Aalberts Industries 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 Aalberts Industries with a short position of SBM Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aalberts Industries and SBM Offshore.
Diversification Opportunities for Aalberts Industries and SBM Offshore
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Aalberts and SBM is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Aalberts Industries 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 Aalberts Industries 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 Aalberts Industries 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 Aalberts Industries i.e., Aalberts Industries and SBM Offshore go up and down completely randomly.
Pair Corralation between Aalberts Industries and SBM Offshore
Assuming the 90 days trading horizon Aalberts Industries NV is expected to under-perform the SBM Offshore. In addition to that, Aalberts Industries is 1.16 times more volatile than SBM Offshore NV. It trades about 0.0 of its total potential returns per unit of risk. SBM Offshore NV is currently generating about 0.04 per unit of volatility. If you would invest 1,366 in SBM Offshore NV on August 24, 2024 and sell it today you would earn a total of 406.00 from holding SBM Offshore NV or generate 29.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aalberts Industries NV vs. SBM Offshore NV
Performance |
| Timeline |
| Aalberts Industries |
| SBM Offshore NV |
Aalberts Industries and SBM Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aalberts Industries and SBM Offshore
The main advantage of trading using opposite Aalberts Industries and SBM Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aalberts Industries 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.| Aalberts Industries vs. Pharming Group NV | Aalberts Industries vs. AMG Advanced Metallurgical | Aalberts Industries vs. Alfen Beheer BV | Aalberts Industries vs. BE Semiconductor Industries |
| SBM Offshore vs. Fugro NV | SBM Offshore vs. Koninklijke Vopak NV | SBM Offshore vs. Randstad NV | SBM Offshore vs. Aalberts Industries NV |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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