Correlation Between BAWAG Group and SBM Offshore
Can any of the company-specific risk be diversified away by investing in both BAWAG Group 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 BAWAG Group and SBM Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BAWAG Group AG and SBM Offshore NV, you can compare the effects of market volatilities on BAWAG Group 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 BAWAG Group with a short position of SBM Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of BAWAG Group and SBM Offshore.
Diversification Opportunities for BAWAG Group and SBM Offshore
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BAWAG and SBM is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding BAWAG Group AG 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 BAWAG Group 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 BAWAG Group AG 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 BAWAG Group i.e., BAWAG Group and SBM Offshore go up and down completely randomly.
Pair Corralation between BAWAG Group and SBM Offshore
Assuming the 90 days horizon BAWAG Group AG is expected to generate 0.77 times more return on investment than SBM Offshore. However, BAWAG Group AG is 1.3 times less risky than SBM Offshore. It trades about 0.11 of its potential returns per unit of risk. SBM Offshore NV is currently generating about 0.08 per unit of risk. If you would invest 6,050 in BAWAG Group AG on September 1, 2024 and sell it today you would earn a total of 1,450 from holding BAWAG Group AG or generate 23.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.24% |
| Values | Daily Returns |
BAWAG Group AG vs. SBM Offshore NV
Performance |
| Timeline |
| BAWAG Group AG |
| SBM Offshore NV |
BAWAG Group and SBM Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BAWAG Group and SBM Offshore
The main advantage of trading using opposite BAWAG Group and SBM Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BAWAG Group 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.| BAWAG Group vs. Raiffeisen Bank International | BAWAG Group vs. Addiko Bank AG | BAWAG Group vs. Wiener Privatbank SE | BAWAG Group vs. RATH Aktiengesellschaft |
| SBM Offshore vs. AMAG Austria Metall | SBM Offshore vs. Raiffeisen Bank International | SBM Offshore vs. Wiener Privatbank SE | SBM Offshore vs. CNH Industrial 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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