Correlation Between SBM OFFSHORE and New York
Can any of the company-specific risk be diversified away by investing in both SBM OFFSHORE and New York 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 New York into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SBM OFFSHORE and The New York, you can compare the effects of market volatilities on SBM OFFSHORE and New York 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 New York. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBM OFFSHORE and New York.
Diversification Opportunities for SBM OFFSHORE and New York
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SBM and New is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding SBM OFFSHORE and The New York in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New York 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 New York. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New York has no effect on the direction of SBM OFFSHORE i.e., SBM OFFSHORE and New York go up and down completely randomly.
Pair Corralation between SBM OFFSHORE and New York
Assuming the 90 days trading horizon SBM OFFSHORE is expected to generate 1.02 times more return on investment than New York. However, SBM OFFSHORE is 1.02 times more volatile than The New York. It trades about 0.35 of its potential returns per unit of risk. The New York is currently generating about -0.21 per unit of risk. If you would invest 1,755 in SBM OFFSHORE on November 27, 2024 and sell it today you would earn a total of 337.00 from holding SBM OFFSHORE or generate 19.2% 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. The New York
Performance |
| Timeline |
| SBM OFFSHORE |
| New York |
SBM OFFSHORE and New York Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SBM OFFSHORE and New York
The main advantage of trading using opposite SBM OFFSHORE and New York positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBM OFFSHORE position performs unexpectedly, New York 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 New York will offset losses from the drop in New York's long position.| SBM OFFSHORE vs. DAIDO METAL TD | SBM OFFSHORE vs. Forsys Metals Corp | SBM OFFSHORE vs. Fortescue Metals Group | SBM OFFSHORE vs. OAKTRSPECLENDNEW |
| New York vs. CORNISH METALS INC | New York vs. GALENA MINING LTD | New York vs. JAPAN AIRLINES | New York vs. GOLDQUEST MINING |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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