Correlation Between SBM OFFSHORE and GFL ENVIRONM(SUBVTSH
Can any of the company-specific risk be diversified away by investing in both SBM OFFSHORE and GFL ENVIRONM(SUBVTSH 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 SBM OFFSHORE and GFL ENVIRONM(SUBVTSH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SBM OFFSHORE and GFL ENVIRONM, you can compare the effects of market volatilities on SBM OFFSHORE and GFL ENVIRONM(SUBVTSH 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 SBM OFFSHORE with a short position of GFL ENVIRONM(SUBVTSH. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBM OFFSHORE and GFL ENVIRONM(SUBVTSH.
Diversification Opportunities for SBM OFFSHORE and GFL ENVIRONM(SUBVTSH
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SBM and GFL is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding SBM OFFSHORE and GFL ENVIRONM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GFL ENVIRONM(SUBVTSH and SBM OFFSHORE 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 SBM OFFSHORE are associated (or correlated) with GFL ENVIRONM(SUBVTSH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GFL ENVIRONM(SUBVTSH has no effect on the direction of SBM OFFSHORE i.e., SBM OFFSHORE and GFL ENVIRONM(SUBVTSH go up and down completely randomly.
Pair Corralation between SBM OFFSHORE and GFL ENVIRONM(SUBVTSH
Assuming the 90 days trading horizon SBM OFFSHORE is expected to generate 6.76 times less return on investment than GFL ENVIRONM(SUBVTSH. In addition to that, SBM OFFSHORE is 1.01 times more volatile than GFL ENVIRONM. It trades about 0.05 of its total potential returns per unit of risk. GFL ENVIRONM is currently generating about 0.32 per unit of volatility. If you would invest 3,840 in GFL ENVIRONM on September 2, 2024 and sell it today you would earn a total of 560.00 from holding GFL ENVIRONM or generate 14.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SBM OFFSHORE vs. GFL ENVIRONM
Performance |
| Timeline |
| SBM OFFSHORE |
| GFL ENVIRONM(SUBVTSH |
SBM OFFSHORE and GFL ENVIRONM(SUBVTSH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SBM OFFSHORE and GFL ENVIRONM(SUBVTSH
The main advantage of trading using opposite SBM OFFSHORE and GFL ENVIRONM(SUBVTSH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBM OFFSHORE position performs unexpectedly, GFL ENVIRONM(SUBVTSH 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 GFL ENVIRONM(SUBVTSH will offset losses from the drop in GFL ENVIRONM(SUBVTSH's long position.| SBM OFFSHORE vs. Federal Agricultural Mortgage | SBM OFFSHORE vs. Corporate Office Properties | SBM OFFSHORE vs. Infrastrutture Wireless Italiane | SBM OFFSHORE vs. AUST AGRICULTURAL |
| GFL ENVIRONM(SUBVTSH vs. Veolia Environnement SA | GFL ENVIRONM(SUBVTSH vs. Superior Plus Corp | GFL ENVIRONM(SUBVTSH vs. NMI Holdings | GFL ENVIRONM(SUBVTSH vs. Origin Agritech |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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