Correlation Between SBM Offshore and 360 Finance
Can any of the company-specific risk be diversified away by investing in both SBM Offshore and 360 Finance 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 360 Finance 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 360 Finance, you can compare the effects of market volatilities on SBM Offshore and 360 Finance 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 360 Finance. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBM Offshore and 360 Finance.
Diversification Opportunities for SBM Offshore and 360 Finance
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SBM and 360 is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding SBM Offshore NV and 360 Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 360 Finance 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 360 Finance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 360 Finance has no effect on the direction of SBM Offshore i.e., SBM Offshore and 360 Finance go up and down completely randomly.
Pair Corralation between SBM Offshore and 360 Finance
Assuming the 90 days horizon SBM Offshore is expected to generate 4.95 times less return on investment than 360 Finance. But when comparing it to its historical volatility, SBM Offshore NV is 5.69 times less risky than 360 Finance. It trades about 0.26 of its potential returns per unit of risk. 360 Finance is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 3,751 in 360 Finance on November 9, 2024 and sell it today you would earn a total of 498.00 from holding 360 Finance or generate 13.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SBM Offshore NV vs. 360 Finance
Performance |
| Timeline |
| SBM Offshore NV |
| 360 Finance |
SBM Offshore and 360 Finance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SBM Offshore and 360 Finance
The main advantage of trading using opposite SBM Offshore and 360 Finance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBM Offshore position performs unexpectedly, 360 Finance 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 360 Finance will offset losses from the drop in 360 Finance's long position.| SBM Offshore vs. Expro Group Holdings | SBM Offshore vs. ChampionX | SBM Offshore vs. Ranger Energy Services | SBM Offshore vs. Cactus Inc |
| 360 Finance vs. Turning Point Brands | 360 Finance vs. British American Tobacco | 360 Finance vs. Philip Morris International | 360 Finance vs. Japan Tobacco ADR |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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