Correlation Between SBM Offshore and Granite Real
Can any of the company-specific risk be diversified away by investing in both SBM Offshore and Granite Real 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 Granite Real 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 Granite Real Estate, you can compare the effects of market volatilities on SBM Offshore and Granite Real 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 Granite Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBM Offshore and Granite Real.
Diversification Opportunities for SBM Offshore and Granite Real
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between SBM and Granite is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding SBM Offshore NV and Granite Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Granite Real Estate 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 Granite Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Granite Real Estate has no effect on the direction of SBM Offshore i.e., SBM Offshore and Granite Real go up and down completely randomly.
Pair Corralation between SBM Offshore and Granite Real
Assuming the 90 days horizon SBM Offshore NV is expected to under-perform the Granite Real. In addition to that, SBM Offshore is 1.1 times more volatile than Granite Real Estate. It trades about -0.24 of its total potential returns per unit of risk. Granite Real Estate is currently generating about -0.14 per unit of volatility. If you would invest 5,477 in Granite Real Estate on September 13, 2024 and sell it today you would lose (360.00) from holding Granite Real Estate or give up 6.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
SBM Offshore NV vs. Granite Real Estate
Performance |
| Timeline |
| SBM Offshore NV |
| Granite Real Estate |
SBM Offshore and Granite Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SBM Offshore and Granite Real
The main advantage of trading using opposite SBM Offshore and Granite Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBM Offshore position performs unexpectedly, Granite Real 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 Granite Real will offset losses from the drop in Granite Real's long position.| SBM Offshore vs. Worley Parsons | SBM Offshore vs. Saipem SpA | SBM Offshore vs. SMG Industries | SBM Offshore vs. Aquagold International |
| Granite Real vs. Aquagold International | Granite Real vs. Morningstar Unconstrained Allocation | Granite Real vs. Thrivent High Yield | Granite Real vs. High Yield Municipal Fund |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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