Correlation Between SBM Offshore and Renesas Electronics
Can any of the company-specific risk be diversified away by investing in both SBM Offshore and Renesas Electronics 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 Renesas Electronics 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 Renesas Electronics, you can compare the effects of market volatilities on SBM Offshore and Renesas Electronics 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 Renesas Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBM Offshore and Renesas Electronics.
Diversification Opportunities for SBM Offshore and Renesas Electronics
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between SBM and Renesas is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding SBM Offshore NV and Renesas Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Renesas Electronics 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 Renesas Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Renesas Electronics has no effect on the direction of SBM Offshore i.e., SBM Offshore and Renesas Electronics go up and down completely randomly.
Pair Corralation between SBM Offshore and Renesas Electronics
Assuming the 90 days horizon SBM Offshore NV is expected to generate 0.15 times more return on investment than Renesas Electronics. However, SBM Offshore NV is 6.77 times less risky than Renesas Electronics. It trades about 0.25 of its potential returns per unit of risk. Renesas Electronics is currently generating about 0.02 per unit of risk. If you would invest 1,743 in SBM Offshore NV on November 3, 2024 and sell it today you would earn a total of 47.00 from holding SBM Offshore NV or generate 2.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SBM Offshore NV vs. Renesas Electronics
Performance |
| Timeline |
| SBM Offshore NV |
| Renesas Electronics |
SBM Offshore and Renesas Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SBM Offshore and Renesas Electronics
The main advantage of trading using opposite SBM Offshore and Renesas Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBM Offshore position performs unexpectedly, Renesas Electronics 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 Renesas Electronics will offset losses from the drop in Renesas Electronics' long position.| SBM Offshore vs. Expro Group Holdings | SBM Offshore vs. ChampionX | SBM Offshore vs. Ranger Energy Services | SBM Offshore vs. Cactus Inc |
| Renesas Electronics vs. Power Integrations | Renesas Electronics vs. Rohm Co Ltd | Renesas Electronics vs. MACOM Technology Solutions | Renesas Electronics vs. Renesas Electronics Corp |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum |