Correlation Between SBM OFFSHORE and REINET INVESTMENTS
Can any of the company-specific risk be diversified away by investing in both SBM OFFSHORE and REINET INVESTMENTS 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 REINET INVESTMENTS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SBM OFFSHORE and REINET INVESTMENTS SCA, you can compare the effects of market volatilities on SBM OFFSHORE and REINET INVESTMENTS 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 REINET INVESTMENTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBM OFFSHORE and REINET INVESTMENTS.
Diversification Opportunities for SBM OFFSHORE and REINET INVESTMENTS
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SBM and REINET is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SBM OFFSHORE and REINET INVESTMENTS SCA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on REINET INVESTMENTS SCA 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 REINET INVESTMENTS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of REINET INVESTMENTS SCA has no effect on the direction of SBM OFFSHORE i.e., SBM OFFSHORE and REINET INVESTMENTS go up and down completely randomly.
Pair Corralation between SBM OFFSHORE and REINET INVESTMENTS
Assuming the 90 days trading horizon SBM OFFSHORE is expected to generate 0.86 times more return on investment than REINET INVESTMENTS. However, SBM OFFSHORE is 1.17 times less risky than REINET INVESTMENTS. It trades about 0.28 of its potential returns per unit of risk. REINET INVESTMENTS SCA is currently generating about 0.03 per unit of risk. If you would invest 1,755 in SBM OFFSHORE on November 28, 2024 and sell it today you would earn a total of 283.00 from holding SBM OFFSHORE or generate 16.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SBM OFFSHORE vs. REINET INVESTMENTS SCA
Performance |
| Timeline |
| SBM OFFSHORE |
| REINET INVESTMENTS SCA |
SBM OFFSHORE and REINET INVESTMENTS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SBM OFFSHORE and REINET INVESTMENTS
The main advantage of trading using opposite SBM OFFSHORE and REINET INVESTMENTS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBM OFFSHORE position performs unexpectedly, REINET INVESTMENTS 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 REINET INVESTMENTS will offset losses from the drop in REINET INVESTMENTS's long position.| SBM OFFSHORE vs. ECHO INVESTMENT ZY | SBM OFFSHORE vs. Japan Asia Investment | SBM OFFSHORE vs. The Yokohama Rubber | SBM OFFSHORE vs. SANOK RUBBER ZY |
| REINET INVESTMENTS vs. SCANSOURCE | REINET INVESTMENTS vs. ePlay Digital | REINET INVESTMENTS vs. Playa Hotels Resorts | REINET INVESTMENTS vs. COLUMBIA SPORTSWEAR |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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