Correlation Between BCE and SBM Offshore
Can any of the company-specific risk be diversified away by investing in both BCE 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 BCE and SBM Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BCE Inc and SBM Offshore NV, you can compare the effects of market volatilities on BCE 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 BCE with a short position of SBM Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of BCE and SBM Offshore.
Diversification Opportunities for BCE and SBM Offshore
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BCE and SBM is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding BCE Inc 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 BCE 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 BCE Inc 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 BCE i.e., BCE and SBM Offshore go up and down completely randomly.
Pair Corralation between BCE and SBM Offshore
Considering the 90-day investment horizon BCE Inc is expected to under-perform the SBM Offshore. But the stock apears to be less risky and, when comparing its historical volatility, BCE Inc is 4.59 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 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,577 in SBM Offshore NV on September 2, 2024 and sell it today you would earn a total of 303.00 from holding SBM Offshore NV or generate 19.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 72.38% |
| Values | Daily Returns |
BCE Inc vs. SBM Offshore NV
Performance |
| Timeline |
| BCE Inc |
| SBM Offshore NV |
BCE and SBM Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BCE and SBM Offshore
The main advantage of trading using opposite BCE and SBM Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BCE 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.The idea behind BCE Inc and SBM Offshore NV pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| SBM Offshore vs. Expro Group Holdings | SBM Offshore vs. ChampionX | SBM Offshore vs. Ranger Energy Services | SBM Offshore vs. Cactus 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Transaction History View history of all your transactions and understand their impact on performance |