Correlation Between SBM Offshore and Playtika Holding
Can any of the company-specific risk be diversified away by investing in both SBM Offshore and Playtika Holding 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 Playtika Holding 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 Playtika Holding Corp, you can compare the effects of market volatilities on SBM Offshore and Playtika Holding 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 Playtika Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBM Offshore and Playtika Holding.
Diversification Opportunities for SBM Offshore and Playtika Holding
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SBM and Playtika is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding SBM Offshore NV and Playtika Holding Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Playtika Holding Corp 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 Playtika Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Playtika Holding Corp has no effect on the direction of SBM Offshore i.e., SBM Offshore and Playtika Holding go up and down completely randomly.
Pair Corralation between SBM Offshore and Playtika Holding
Assuming the 90 days horizon SBM Offshore NV is expected to generate 1.04 times more return on investment than Playtika Holding. However, SBM Offshore is 1.04 times more volatile than Playtika Holding Corp. It trades about 0.06 of its potential returns per unit of risk. Playtika Holding Corp is currently generating about -0.02 per unit of risk. If you would invest 1,435 in SBM Offshore NV on September 2, 2024 and sell it today you would earn a total of 445.00 from holding SBM Offshore NV or generate 31.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 63.17% |
| Values | Daily Returns |
SBM Offshore NV vs. Playtika Holding Corp
Performance |
| Timeline |
| SBM Offshore NV |
| Playtika Holding Corp |
SBM Offshore and Playtika Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SBM Offshore and Playtika Holding
The main advantage of trading using opposite SBM Offshore and Playtika Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBM Offshore position performs unexpectedly, Playtika Holding 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 Playtika Holding will offset losses from the drop in Playtika Holding's long position.| SBM Offshore vs. Expro Group Holdings | SBM Offshore vs. ChampionX | SBM Offshore vs. Ranger Energy Services | SBM Offshore vs. Cactus Inc |
| Playtika Holding vs. Gravity Co | Playtika Holding vs. NetEase | Playtika Holding vs. Snail, Class A | Playtika Holding vs. GameSquare 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 CEOs Directory module to screen CEOs from public companies around the world.
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