Correlation Between DSV Panalpina and SBM OFFSHORE
Can any of the company-specific risk be diversified away by investing in both DSV Panalpina 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 DSV Panalpina and SBM OFFSHORE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DSV Panalpina AS and SBM OFFSHORE, you can compare the effects of market volatilities on DSV Panalpina 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 DSV Panalpina with a short position of SBM OFFSHORE. Check out your portfolio center. Please also check ongoing floating volatility patterns of DSV Panalpina and SBM OFFSHORE.
Diversification Opportunities for DSV Panalpina and SBM OFFSHORE
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between DSV and SBM is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding DSV Panalpina AS and SBM OFFSHORE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SBM OFFSHORE and DSV Panalpina 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 DSV Panalpina AS 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 has no effect on the direction of DSV Panalpina i.e., DSV Panalpina and SBM OFFSHORE go up and down completely randomly.
Pair Corralation between DSV Panalpina and SBM OFFSHORE
Assuming the 90 days trading horizon DSV Panalpina AS is expected to generate 0.8 times more return on investment than SBM OFFSHORE. However, DSV Panalpina AS is 1.25 times less risky than SBM OFFSHORE. It trades about 0.01 of its potential returns per unit of risk. SBM OFFSHORE is currently generating about -0.01 per unit of risk. If you would invest 20,370 in DSV Panalpina AS on September 13, 2024 and sell it today you would earn a total of 80.00 from holding DSV Panalpina AS or generate 0.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 97.73% |
| Values | Daily Returns |
DSV Panalpina AS vs. SBM OFFSHORE
Performance |
| Timeline |
| DSV Panalpina AS |
| SBM OFFSHORE |
DSV Panalpina and SBM OFFSHORE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DSV Panalpina and SBM OFFSHORE
The main advantage of trading using opposite DSV Panalpina and SBM OFFSHORE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DSV Panalpina 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.| DSV Panalpina vs. BlueScope Steel Limited | DSV Panalpina vs. CECO ENVIRONMENTAL | DSV Panalpina vs. PLAYTIKA HOLDING DL 01 | DSV Panalpina vs. Khiron Life Sciences |
| SBM OFFSHORE vs. Apple Inc | SBM OFFSHORE vs. Apple Inc | SBM OFFSHORE vs. Apple Inc | SBM OFFSHORE vs. Apple 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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