Correlation Between SBM OFFSHORE and MCEWEN MINING
Can any of the company-specific risk be diversified away by investing in both SBM OFFSHORE and MCEWEN MINING 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 MCEWEN MINING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SBM OFFSHORE and MCEWEN MINING INC, you can compare the effects of market volatilities on SBM OFFSHORE and MCEWEN MINING 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 MCEWEN MINING. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBM OFFSHORE and MCEWEN MINING.
Diversification Opportunities for SBM OFFSHORE and MCEWEN MINING
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between SBM and MCEWEN is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding SBM OFFSHORE and MCEWEN MINING INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MCEWEN MINING INC 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 MCEWEN MINING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MCEWEN MINING INC has no effect on the direction of SBM OFFSHORE i.e., SBM OFFSHORE and MCEWEN MINING go up and down completely randomly.
Pair Corralation between SBM OFFSHORE and MCEWEN MINING
Assuming the 90 days trading horizon SBM OFFSHORE is expected to generate 0.48 times more return on investment than MCEWEN MINING. However, SBM OFFSHORE is 2.1 times less risky than MCEWEN MINING. It trades about 0.13 of its potential returns per unit of risk. MCEWEN MINING INC is currently generating about -0.17 per unit of risk. If you would invest 1,691 in SBM OFFSHORE on August 28, 2024 and sell it today you would earn a total of 85.00 from holding SBM OFFSHORE or generate 5.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SBM OFFSHORE vs. MCEWEN MINING INC
Performance |
| Timeline |
| SBM OFFSHORE |
| MCEWEN MINING INC |
SBM OFFSHORE and MCEWEN MINING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SBM OFFSHORE and MCEWEN MINING
The main advantage of trading using opposite SBM OFFSHORE and MCEWEN MINING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBM OFFSHORE position performs unexpectedly, MCEWEN MINING 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 MCEWEN MINING will offset losses from the drop in MCEWEN MINING's long position.| SBM OFFSHORE vs. CarsalesCom | SBM OFFSHORE vs. Tyson Foods | SBM OFFSHORE vs. Performance Food Group | SBM OFFSHORE vs. YATRA ONLINE DL 0001 |
| MCEWEN MINING vs. Superior Plus Corp | MCEWEN MINING vs. NMI Holdings | MCEWEN MINING vs. Origin Agritech | MCEWEN MINING vs. SIVERS SEMICONDUCTORS AB |
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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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