Correlation Between SBM Offshore and LandBridge Company
Can any of the company-specific risk be diversified away by investing in both SBM Offshore and LandBridge Company 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 LandBridge Company 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 LandBridge Company LLC, you can compare the effects of market volatilities on SBM Offshore and LandBridge Company 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 LandBridge Company. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBM Offshore and LandBridge Company.
Diversification Opportunities for SBM Offshore and LandBridge Company
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between SBM and LandBridge is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding SBM Offshore NV and LandBridge Company LLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LandBridge Company 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 LandBridge Company. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LandBridge Company has no effect on the direction of SBM Offshore i.e., SBM Offshore and LandBridge Company go up and down completely randomly.
Pair Corralation between SBM Offshore and LandBridge Company
Assuming the 90 days horizon SBM Offshore NV is expected to generate 0.42 times more return on investment than LandBridge Company. However, SBM Offshore NV is 2.36 times less risky than LandBridge Company. It trades about -0.24 of its potential returns per unit of risk. LandBridge Company LLC is currently generating about -0.12 per unit of risk. If you would invest 1,900 in SBM Offshore NV on September 14, 2024 and sell it today you would lose (210.00) from holding SBM Offshore NV or give up 11.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SBM Offshore NV vs. LandBridge Company LLC
Performance |
| Timeline |
| SBM Offshore NV |
| LandBridge Company |
SBM Offshore and LandBridge Company Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SBM Offshore and LandBridge Company
The main advantage of trading using opposite SBM Offshore and LandBridge Company positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBM Offshore position performs unexpectedly, LandBridge Company 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 LandBridge Company will offset losses from the drop in LandBridge Company's long position.| SBM Offshore vs. Expro Group Holdings | SBM Offshore vs. ChampionX | SBM Offshore vs. Ranger Energy Services | SBM Offshore vs. Cactus Inc |
| LandBridge Company vs. Universal Music Group | LandBridge Company vs. Zoom Video Communications | LandBridge Company vs. WT Offshore | LandBridge Company vs. SBM Offshore NV |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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