Correlation Between SBM OFFSHORE and Casio Computer
Can any of the company-specific risk be diversified away by investing in both SBM OFFSHORE and Casio Computer 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 Casio Computer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SBM OFFSHORE and Casio Computer CoLtd, you can compare the effects of market volatilities on SBM OFFSHORE and Casio Computer 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 Casio Computer. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBM OFFSHORE and Casio Computer.
Diversification Opportunities for SBM OFFSHORE and Casio Computer
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SBM and Casio is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding SBM OFFSHORE and Casio Computer CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Casio Computer CoLtd 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 Casio Computer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Casio Computer CoLtd has no effect on the direction of SBM OFFSHORE i.e., SBM OFFSHORE and Casio Computer go up and down completely randomly.
Pair Corralation between SBM OFFSHORE and Casio Computer
Assuming the 90 days trading horizon SBM OFFSHORE is expected to generate 1.0 times more return on investment than Casio Computer. However, SBM OFFSHORE is 1.0 times more volatile than Casio Computer CoLtd. It trades about 0.1 of its potential returns per unit of risk. Casio Computer CoLtd is currently generating about -0.01 per unit of risk. If you would invest 1,197 in SBM OFFSHORE on September 3, 2024 and sell it today you would earn a total of 503.00 from holding SBM OFFSHORE or generate 42.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SBM OFFSHORE vs. Casio Computer CoLtd
Performance |
| Timeline |
| SBM OFFSHORE |
| Casio Computer CoLtd |
SBM OFFSHORE and Casio Computer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SBM OFFSHORE and Casio Computer
The main advantage of trading using opposite SBM OFFSHORE and Casio Computer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBM OFFSHORE position performs unexpectedly, Casio Computer 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 Casio Computer will offset losses from the drop in Casio Computer's long position.| SBM OFFSHORE vs. TOTAL GABON | SBM OFFSHORE vs. Walgreens Boots Alliance | SBM OFFSHORE vs. Banco Santander SA | SBM OFFSHORE vs. Peak Resources Limited |
| Casio Computer vs. Apple Inc | Casio Computer vs. Samsung Electronics Co | Casio Computer vs. Samsung Electronics Co | Casio Computer vs. Sony Group |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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