Correlation Between SBM OFFSHORE and SIEM OFFSHORE
Can any of the company-specific risk be diversified away by investing in both SBM OFFSHORE and SIEM OFFSHORE 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 SIEM OFFSHORE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SBM OFFSHORE and SIEM OFFSHORE NEW, you can compare the effects of market volatilities on SBM OFFSHORE and SIEM OFFSHORE 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 SIEM OFFSHORE. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBM OFFSHORE and SIEM OFFSHORE.
Diversification Opportunities for SBM OFFSHORE and SIEM OFFSHORE
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between SBM and SIEM is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding SBM OFFSHORE and SIEM OFFSHORE NEW in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SIEM OFFSHORE NEW 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 SIEM OFFSHORE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SIEM OFFSHORE NEW has no effect on the direction of SBM OFFSHORE i.e., SBM OFFSHORE and SIEM OFFSHORE go up and down completely randomly.
Pair Corralation between SBM OFFSHORE and SIEM OFFSHORE
Assuming the 90 days trading horizon SBM OFFSHORE is expected to generate 6.09 times less return on investment than SIEM OFFSHORE. But when comparing it to its historical volatility, SBM OFFSHORE is 1.35 times less risky than SIEM OFFSHORE. It trades about 0.07 of its potential returns per unit of risk. SIEM OFFSHORE NEW is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 211.00 in SIEM OFFSHORE NEW on August 29, 2024 and sell it today you would earn a total of 37.00 from holding SIEM OFFSHORE NEW or generate 17.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SBM OFFSHORE vs. SIEM OFFSHORE NEW
Performance |
| Timeline |
| SBM OFFSHORE |
| SIEM OFFSHORE NEW |
SBM OFFSHORE and SIEM OFFSHORE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SBM OFFSHORE and SIEM OFFSHORE
The main advantage of trading using opposite SBM OFFSHORE and SIEM OFFSHORE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBM OFFSHORE position performs unexpectedly, SIEM OFFSHORE 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 SIEM OFFSHORE will offset losses from the drop in SIEM OFFSHORE's long position.| SBM OFFSHORE vs. Apple Inc | SBM OFFSHORE vs. Apple Inc | SBM OFFSHORE vs. Microsoft | SBM OFFSHORE vs. Microsoft |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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