Correlation Between SBM OFFSHORE and SEKISUI CHEMICAL
Can any of the company-specific risk be diversified away by investing in both SBM OFFSHORE and SEKISUI CHEMICAL 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 SEKISUI CHEMICAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SBM OFFSHORE and SEKISUI CHEMICAL, you can compare the effects of market volatilities on SBM OFFSHORE and SEKISUI CHEMICAL 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 SEKISUI CHEMICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBM OFFSHORE and SEKISUI CHEMICAL.
Diversification Opportunities for SBM OFFSHORE and SEKISUI CHEMICAL
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between SBM and SEKISUI is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding SBM OFFSHORE and SEKISUI CHEMICAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEKISUI CHEMICAL 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 SEKISUI CHEMICAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEKISUI CHEMICAL has no effect on the direction of SBM OFFSHORE i.e., SBM OFFSHORE and SEKISUI CHEMICAL go up and down completely randomly.
Pair Corralation between SBM OFFSHORE and SEKISUI CHEMICAL
Assuming the 90 days trading horizon SBM OFFSHORE is expected to under-perform the SEKISUI CHEMICAL. In addition to that, SBM OFFSHORE is 1.2 times more volatile than SEKISUI CHEMICAL. It trades about -0.07 of its total potential returns per unit of risk. SEKISUI CHEMICAL is currently generating about 0.13 per unit of volatility. If you would invest 1,420 in SEKISUI CHEMICAL on September 14, 2024 and sell it today you would earn a total of 60.00 from holding SEKISUI CHEMICAL or generate 4.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SBM OFFSHORE vs. SEKISUI CHEMICAL
Performance |
| Timeline |
| SBM OFFSHORE |
| SEKISUI CHEMICAL |
SBM OFFSHORE and SEKISUI CHEMICAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SBM OFFSHORE and SEKISUI CHEMICAL
The main advantage of trading using opposite SBM OFFSHORE and SEKISUI CHEMICAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBM OFFSHORE position performs unexpectedly, SEKISUI CHEMICAL 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 SEKISUI CHEMICAL will offset losses from the drop in SEKISUI CHEMICAL's long position.| SBM OFFSHORE vs. Apple Inc | SBM OFFSHORE vs. Apple Inc | SBM OFFSHORE vs. Apple Inc | SBM OFFSHORE vs. Apple Inc |
| SEKISUI CHEMICAL vs. Wayside Technology Group | SEKISUI CHEMICAL vs. PKSHA TECHNOLOGY INC | SEKISUI CHEMICAL vs. SIEM OFFSHORE NEW | SEKISUI CHEMICAL 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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