Correlation Between SBM Offshore and Cistera Networks
Can any of the company-specific risk be diversified away by investing in both SBM Offshore and Cistera Networks 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 Cistera Networks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SBM Offshore NV and Cistera Networks, you can compare the effects of market volatilities on SBM Offshore and Cistera Networks 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 Cistera Networks. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBM Offshore and Cistera Networks.
Diversification Opportunities for SBM Offshore and Cistera Networks
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SBM and Cistera is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SBM Offshore NV and Cistera Networks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cistera Networks 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 NV are associated (or correlated) with Cistera Networks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cistera Networks has no effect on the direction of SBM Offshore i.e., SBM Offshore and Cistera Networks go up and down completely randomly.
Pair Corralation between SBM Offshore and Cistera Networks
Assuming the 90 days horizon SBM Offshore is expected to generate 1.69 times less return on investment than Cistera Networks. But when comparing it to its historical volatility, SBM Offshore NV is 4.11 times less risky than Cistera Networks. It trades about 0.09 of its potential returns per unit of risk. Cistera Networks is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 0.01 in Cistera Networks on September 1, 2024 and sell it today you would earn a total of 0.00 from holding Cistera Networks or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 94.05% |
| Values | Daily Returns |
SBM Offshore NV vs. Cistera Networks
Performance |
| Timeline |
| SBM Offshore NV |
| Cistera Networks |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
SBM Offshore and Cistera Networks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SBM Offshore and Cistera Networks
The main advantage of trading using opposite SBM Offshore and Cistera Networks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBM Offshore position performs unexpectedly, Cistera Networks 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 Cistera Networks will offset losses from the drop in Cistera Networks' long position.| SBM Offshore vs. Expro Group Holdings | SBM Offshore vs. ChampionX | SBM Offshore vs. Ranger Energy Services | SBM Offshore vs. Cactus Inc |
| Cistera Networks vs. Xponential Fitness | Cistera Networks vs. Amgen Inc | Cistera Networks vs. Aquestive Therapeutics | Cistera Networks vs. Q2 Holdings |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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