Correlation Between AMAG Austria and SBM Offshore
Can any of the company-specific risk be diversified away by investing in both AMAG Austria 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 AMAG Austria and SBM Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AMAG Austria Metall and SBM Offshore NV, you can compare the effects of market volatilities on AMAG Austria 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 AMAG Austria with a short position of SBM Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMAG Austria and SBM Offshore.
Diversification Opportunities for AMAG Austria and SBM Offshore
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AMAG and SBM is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding AMAG Austria Metall 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 AMAG Austria 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 AMAG Austria Metall 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 AMAG Austria i.e., AMAG Austria and SBM Offshore go up and down completely randomly.
Pair Corralation between AMAG Austria and SBM Offshore
Assuming the 90 days trading horizon AMAG Austria Metall is expected to under-perform the SBM Offshore. But the stock apears to be less risky and, when comparing its historical volatility, AMAG Austria Metall is 1.45 times less risky than SBM Offshore. The stock trades about -0.07 of its potential returns per unit of risk. The SBM Offshore NV is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,275 in SBM Offshore NV on August 27, 2024 and sell it today you would earn a total of 503.00 from holding SBM Offshore NV or generate 39.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AMAG Austria Metall vs. SBM Offshore NV
Performance |
| Timeline |
| AMAG Austria Metall |
| SBM Offshore NV |
AMAG Austria and SBM Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMAG Austria and SBM Offshore
The main advantage of trading using opposite AMAG Austria and SBM Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMAG Austria 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.| AMAG Austria vs. Lenzing Aktiengesellschaft | AMAG Austria vs. Voestalpine AG | AMAG Austria vs. EVN AG | AMAG Austria vs. Facc AG |
| SBM Offshore vs. Semperit Aktiengesellschaft Holding | SBM Offshore vs. Oesterr Post AG | SBM Offshore vs. Voestalpine AG | SBM Offshore vs. Universal Music Group |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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