Correlation Between Ming Le and SBM OFFSHORE
Can any of the company-specific risk be diversified away by investing in both Ming Le and SBM 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 Ming Le and SBM OFFSHORE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ming Le Sports and SBM OFFSHORE, you can compare the effects of market volatilities on Ming Le and SBM 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 Ming Le with a short position of SBM OFFSHORE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ming Le and SBM OFFSHORE.
Diversification Opportunities for Ming Le and SBM OFFSHORE
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ming and SBM is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Ming Le Sports and SBM OFFSHORE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SBM OFFSHORE and Ming Le 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 Ming Le Sports are associated (or correlated) with SBM OFFSHORE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SBM OFFSHORE has no effect on the direction of Ming Le i.e., Ming Le and SBM OFFSHORE go up and down completely randomly.
Pair Corralation between Ming Le and SBM OFFSHORE
Assuming the 90 days trading horizon Ming Le is expected to generate 2.11 times less return on investment than SBM OFFSHORE. In addition to that, Ming Le is 1.76 times more volatile than SBM OFFSHORE. It trades about 0.02 of its total potential returns per unit of risk. SBM OFFSHORE is currently generating about 0.09 per unit of volatility. If you would invest 1,159 in SBM OFFSHORE on September 14, 2024 and sell it today you would earn a total of 507.00 from holding SBM OFFSHORE or generate 43.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.64% |
| Values | Daily Returns |
Ming Le Sports vs. SBM OFFSHORE
Performance |
| Timeline |
| Ming Le Sports |
| SBM OFFSHORE |
Ming Le and SBM OFFSHORE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ming Le and SBM OFFSHORE
The main advantage of trading using opposite Ming Le and SBM OFFSHORE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ming Le position performs unexpectedly, SBM 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 SBM OFFSHORE will offset losses from the drop in SBM OFFSHORE's long position.| Ming Le vs. SBA Communications Corp | Ming Le vs. INTERSHOP Communications Aktiengesellschaft | Ming Le vs. Verizon Communications | Ming Le vs. Consolidated Communications Holdings |
| SBM OFFSHORE vs. Apple Inc | SBM OFFSHORE vs. Apple Inc | SBM OFFSHORE vs. Apple Inc | SBM OFFSHORE vs. Apple Inc |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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