Correlation Between SBM OFFSHORE and Fukuyama Transporting
Can any of the company-specific risk be diversified away by investing in both SBM OFFSHORE and Fukuyama Transporting 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 Fukuyama Transporting into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SBM OFFSHORE and Fukuyama Transporting Co, you can compare the effects of market volatilities on SBM OFFSHORE and Fukuyama Transporting 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 Fukuyama Transporting. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBM OFFSHORE and Fukuyama Transporting.
Diversification Opportunities for SBM OFFSHORE and Fukuyama Transporting
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SBM and Fukuyama is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding SBM OFFSHORE and Fukuyama Transporting Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fukuyama Transporting 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 Fukuyama Transporting. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fukuyama Transporting has no effect on the direction of SBM OFFSHORE i.e., SBM OFFSHORE and Fukuyama Transporting go up and down completely randomly.
Pair Corralation between SBM OFFSHORE and Fukuyama Transporting
Assuming the 90 days trading horizon SBM OFFSHORE is expected to generate 0.66 times more return on investment than Fukuyama Transporting. However, SBM OFFSHORE is 1.51 times less risky than Fukuyama Transporting. It trades about 0.07 of its potential returns per unit of risk. Fukuyama Transporting Co is currently generating about 0.01 per unit of risk. If you would invest 1,691 in SBM OFFSHORE on August 29, 2024 and sell it today you would earn a total of 41.00 from holding SBM OFFSHORE or generate 2.42% 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. Fukuyama Transporting Co
Performance |
| Timeline |
| SBM OFFSHORE |
| Fukuyama Transporting |
SBM OFFSHORE and Fukuyama Transporting Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SBM OFFSHORE and Fukuyama Transporting
The main advantage of trading using opposite SBM OFFSHORE and Fukuyama Transporting positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBM OFFSHORE position performs unexpectedly, Fukuyama Transporting 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 Fukuyama Transporting will offset losses from the drop in Fukuyama Transporting's long position.| SBM OFFSHORE vs. Apple Inc | SBM OFFSHORE vs. Apple Inc | SBM OFFSHORE vs. Microsoft | SBM OFFSHORE vs. Microsoft |
| Fukuyama Transporting vs. Gruppo Mutuionline SpA | Fukuyama Transporting vs. REVO INSURANCE SPA | Fukuyama Transporting vs. Chiba Bank | Fukuyama Transporting vs. JSC Halyk bank |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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