Correlation Between Blue Star and SBM Offshore
Can any of the company-specific risk be diversified away by investing in both Blue Star 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 Blue Star and SBM Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blue Star Capital and SBM Offshore NV, you can compare the effects of market volatilities on Blue Star 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 Blue Star with a short position of SBM Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blue Star and SBM Offshore.
Diversification Opportunities for Blue Star and SBM Offshore
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Blue and SBM is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Blue Star Capital 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 Blue Star 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 Blue Star Capital 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 Blue Star i.e., Blue Star and SBM Offshore go up and down completely randomly.
Pair Corralation between Blue Star and SBM Offshore
Assuming the 90 days trading horizon Blue Star Capital is expected to generate 12.58 times more return on investment than SBM Offshore. However, Blue Star is 12.58 times more volatile than SBM Offshore NV. It trades about 0.12 of its potential returns per unit of risk. SBM Offshore NV is currently generating about -0.22 per unit of risk. If you would invest 1.25 in Blue Star Capital on September 18, 2024 and sell it today you would earn a total of 0.25 from holding Blue Star Capital or generate 20.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Blue Star Capital vs. SBM Offshore NV
Performance |
| Timeline |
| Blue Star Capital |
| SBM Offshore NV |
Blue Star and SBM Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blue Star and SBM Offshore
The main advantage of trading using opposite Blue Star and SBM Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blue Star 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.| Blue Star vs. Catalyst Media Group | Blue Star vs. CATLIN GROUP | Blue Star vs. Tamburi Investment Partners | Blue Star vs. Magnora ASA |
| 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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