Correlation Between SBM OFFSHORE and ALBIS LEASING
Can any of the company-specific risk be diversified away by investing in both SBM OFFSHORE and ALBIS LEASING 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 ALBIS LEASING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SBM OFFSHORE and ALBIS LEASING AG, you can compare the effects of market volatilities on SBM OFFSHORE and ALBIS LEASING 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 ALBIS LEASING. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBM OFFSHORE and ALBIS LEASING.
Diversification Opportunities for SBM OFFSHORE and ALBIS LEASING
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SBM and ALBIS is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding SBM OFFSHORE and ALBIS LEASING AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALBIS LEASING AG 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 ALBIS LEASING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALBIS LEASING AG has no effect on the direction of SBM OFFSHORE i.e., SBM OFFSHORE and ALBIS LEASING go up and down completely randomly.
Pair Corralation between SBM OFFSHORE and ALBIS LEASING
Assuming the 90 days trading horizon SBM OFFSHORE is expected to generate 1.83 times more return on investment than ALBIS LEASING. However, SBM OFFSHORE is 1.83 times more volatile than ALBIS LEASING AG. It trades about 0.05 of its potential returns per unit of risk. ALBIS LEASING AG is currently generating about 0.07 per unit of risk. If you would invest 1,272 in SBM OFFSHORE on November 6, 2024 and sell it today you would earn a total of 488.00 from holding SBM OFFSHORE or generate 38.36% 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. ALBIS LEASING AG
Performance |
| Timeline |
| SBM OFFSHORE |
| ALBIS LEASING AG |
SBM OFFSHORE and ALBIS LEASING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SBM OFFSHORE and ALBIS LEASING
The main advantage of trading using opposite SBM OFFSHORE and ALBIS LEASING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBM OFFSHORE position performs unexpectedly, ALBIS LEASING 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 ALBIS LEASING will offset losses from the drop in ALBIS LEASING'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 |
| ALBIS LEASING vs. Methode Electronics | ALBIS LEASING vs. CLEAN ENERGY FUELS | ALBIS LEASING vs. THORNEY TECHS LTD | ALBIS LEASING vs. GLG LIFE TECH |
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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