Correlation Between SBM OFFSHORE and GRUPO CARSO-A1
Can any of the company-specific risk be diversified away by investing in both SBM OFFSHORE and GRUPO CARSO-A1 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 GRUPO CARSO-A1 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SBM OFFSHORE and GRUPO CARSO A1, you can compare the effects of market volatilities on SBM OFFSHORE and GRUPO CARSO-A1 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 GRUPO CARSO-A1. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBM OFFSHORE and GRUPO CARSO-A1.
Diversification Opportunities for SBM OFFSHORE and GRUPO CARSO-A1
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between SBM and GRUPO is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding SBM OFFSHORE and GRUPO CARSO A1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GRUPO CARSO A1 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 GRUPO CARSO-A1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GRUPO CARSO A1 has no effect on the direction of SBM OFFSHORE i.e., SBM OFFSHORE and GRUPO CARSO-A1 go up and down completely randomly.
Pair Corralation between SBM OFFSHORE and GRUPO CARSO-A1
Assuming the 90 days trading horizon SBM OFFSHORE is expected to generate 3.08 times less return on investment than GRUPO CARSO-A1. But when comparing it to its historical volatility, SBM OFFSHORE is 2.44 times less risky than GRUPO CARSO-A1. It trades about 0.05 of its potential returns per unit of risk. GRUPO CARSO A1 is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 236.00 in GRUPO CARSO A1 on November 6, 2024 and sell it today you would earn a total of 304.00 from holding GRUPO CARSO A1 or generate 128.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SBM OFFSHORE vs. GRUPO CARSO A1
Performance |
| Timeline |
| SBM OFFSHORE |
| GRUPO CARSO A1 |
SBM OFFSHORE and GRUPO CARSO-A1 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SBM OFFSHORE and GRUPO CARSO-A1
The main advantage of trading using opposite SBM OFFSHORE and GRUPO CARSO-A1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBM OFFSHORE position performs unexpectedly, GRUPO CARSO-A1 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 GRUPO CARSO-A1 will offset losses from the drop in GRUPO CARSO-A1's long position.| SBM OFFSHORE vs. United Airlines Holdings | SBM OFFSHORE vs. Tencent Music Entertainment | SBM OFFSHORE vs. Fuji Media Holdings | SBM OFFSHORE vs. AEGEAN AIRLINES |
| GRUPO CARSO-A1 vs. Ross Stores | GRUPO CARSO-A1 vs. The Boston Beer | GRUPO CARSO-A1 vs. Monster Beverage Corp | GRUPO CARSO-A1 vs. H2O Retailing |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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