Correlation Between SBM OFFSHORE and ImagineAR
Can any of the company-specific risk be diversified away by investing in both SBM OFFSHORE and ImagineAR 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 ImagineAR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SBM OFFSHORE and ImagineAR, you can compare the effects of market volatilities on SBM OFFSHORE and ImagineAR 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 ImagineAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBM OFFSHORE and ImagineAR.
Diversification Opportunities for SBM OFFSHORE and ImagineAR
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SBM and ImagineAR is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding SBM OFFSHORE and ImagineAR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ImagineAR 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 ImagineAR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ImagineAR has no effect on the direction of SBM OFFSHORE i.e., SBM OFFSHORE and ImagineAR go up and down completely randomly.
Pair Corralation between SBM OFFSHORE and ImagineAR
Assuming the 90 days trading horizon SBM OFFSHORE is expected to generate 0.16 times more return on investment than ImagineAR. However, SBM OFFSHORE is 6.16 times less risky than ImagineAR. It trades about -0.23 of its potential returns per unit of risk. ImagineAR is currently generating about -0.27 per unit of risk. If you would invest 1,776 in SBM OFFSHORE on September 24, 2024 and sell it today you would lose (109.00) from holding SBM OFFSHORE or give up 6.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SBM OFFSHORE vs. ImagineAR
Performance |
| Timeline |
| SBM OFFSHORE |
| ImagineAR |
SBM OFFSHORE and ImagineAR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SBM OFFSHORE and ImagineAR
The main advantage of trading using opposite SBM OFFSHORE and ImagineAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBM OFFSHORE position performs unexpectedly, ImagineAR 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 ImagineAR will offset losses from the drop in ImagineAR's long position.| SBM OFFSHORE vs. Apple Inc | SBM OFFSHORE vs. Apple Inc | SBM OFFSHORE vs. Apple Inc | SBM OFFSHORE vs. Microsoft |
| ImagineAR vs. Corporate Office Properties | ImagineAR vs. SBM OFFSHORE | ImagineAR vs. Salesforce | ImagineAR vs. CARSALESCOM |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |