Correlation Between SBM Offshore and First Republic
Can any of the company-specific risk be diversified away by investing in both SBM Offshore and First Republic 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 First Republic 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 First Republic Bank, you can compare the effects of market volatilities on SBM Offshore and First Republic 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 First Republic. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBM Offshore and First Republic.
Diversification Opportunities for SBM Offshore and First Republic
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between SBM and First is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding SBM Offshore NV and First Republic Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Republic Bank 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 First Republic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Republic Bank has no effect on the direction of SBM Offshore i.e., SBM Offshore and First Republic go up and down completely randomly.
Pair Corralation between SBM Offshore and First Republic
If you would invest 1,211 in SBM Offshore NV on September 14, 2024 and sell it today you would earn a total of 479.00 from holding SBM Offshore NV or generate 39.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.5% |
| Values | Daily Returns |
SBM Offshore NV vs. First Republic Bank
Performance |
| Timeline |
| SBM Offshore NV |
| First Republic Bank |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
SBM Offshore and First Republic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SBM Offshore and First Republic
The main advantage of trading using opposite SBM Offshore and First Republic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBM Offshore position performs unexpectedly, First Republic 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 First Republic will offset losses from the drop in First Republic's long position.| SBM Offshore vs. Expro Group Holdings | SBM Offshore vs. ChampionX | SBM Offshore vs. Ranger Energy Services | SBM Offshore vs. Cactus Inc |
| First Republic vs. Apogee Therapeutics, Common | First Republic vs. WT Offshore | First Republic vs. SBM Offshore NV | First Republic vs. Genfit |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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