Correlation Between SBM Offshore and SFL
Can any of the company-specific risk be diversified away by investing in both SBM Offshore and SFL 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 SFL 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 SFL Corporation, you can compare the effects of market volatilities on SBM Offshore and SFL 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 SFL. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBM Offshore and SFL.
Diversification Opportunities for SBM Offshore and SFL
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SBM and SFL is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding SBM Offshore NV and SFL Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SFL Corporation 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 SFL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SFL Corporation has no effect on the direction of SBM Offshore i.e., SBM Offshore and SFL go up and down completely randomly.
Pair Corralation between SBM Offshore and SFL
Assuming the 90 days horizon SBM Offshore NV is expected to generate 1.34 times more return on investment than SFL. However, SBM Offshore is 1.34 times more volatile than SFL Corporation. It trades about 0.11 of its potential returns per unit of risk. SFL Corporation is currently generating about 0.01 per unit of risk. If you would invest 1,245 in SBM Offshore NV on September 3, 2024 and sell it today you would earn a total of 635.00 from holding SBM Offshore NV or generate 51.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 77.33% |
| Values | Daily Returns |
SBM Offshore NV vs. SFL Corp.
Performance |
| Timeline |
| SBM Offshore NV |
| SFL Corporation |
SBM Offshore and SFL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SBM Offshore and SFL
The main advantage of trading using opposite SBM Offshore and SFL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBM Offshore position performs unexpectedly, SFL 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 SFL will offset losses from the drop in SFL's long position.| SBM Offshore vs. Expro Group Holdings | SBM Offshore vs. ChampionX | SBM Offshore vs. Ranger Energy Services | SBM Offshore vs. Cactus Inc |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories |