Correlation Between SBM OFFSHORE and Media
Can any of the company-specific risk be diversified away by investing in both SBM OFFSHORE and Media 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 Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SBM OFFSHORE and Media and Games, you can compare the effects of market volatilities on SBM OFFSHORE and Media 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 Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBM OFFSHORE and Media.
Diversification Opportunities for SBM OFFSHORE and Media
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between SBM and Media is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding SBM OFFSHORE and Media and Games in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Media and Games 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 Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Media and Games has no effect on the direction of SBM OFFSHORE i.e., SBM OFFSHORE and Media go up and down completely randomly.
Pair Corralation between SBM OFFSHORE and Media
Assuming the 90 days trading horizon SBM OFFSHORE is expected to generate 0.4 times more return on investment than Media. However, SBM OFFSHORE is 2.47 times less risky than Media. It trades about 0.33 of its potential returns per unit of risk. Media and Games is currently generating about -0.47 per unit of risk. If you would invest 1,665 in SBM OFFSHORE on October 16, 2024 and sell it today you would earn a total of 121.00 from holding SBM OFFSHORE or generate 7.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.12% |
| Values | Daily Returns |
SBM OFFSHORE vs. Media and Games
Performance |
| Timeline |
| SBM OFFSHORE |
| Media and Games |
SBM OFFSHORE and Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SBM OFFSHORE and Media
The main advantage of trading using opposite SBM OFFSHORE and Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBM OFFSHORE position performs unexpectedly, Media 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 Media will offset losses from the drop in Media's long position.| SBM OFFSHORE vs. Lendlease Group | SBM OFFSHORE vs. ANTA SPORTS PRODUCT | SBM OFFSHORE vs. FIRST SHIP LEASE | SBM OFFSHORE vs. Global Ship Lease |
| Media vs. Broadcom | Media vs. Broadwind | Media vs. TITANIUM TRANSPORTGROUP | Media vs. Yuexiu Transport Infrastructure |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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