Correlation Between SBM Offshore and Summa Silver
Can any of the company-specific risk be diversified away by investing in both SBM Offshore and Summa Silver 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 Summa Silver 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 Summa Silver Corp, you can compare the effects of market volatilities on SBM Offshore and Summa Silver 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 Summa Silver. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBM Offshore and Summa Silver.
Diversification Opportunities for SBM Offshore and Summa Silver
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between SBM and Summa is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding SBM Offshore NV and Summa Silver Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Summa Silver 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 Summa Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Summa Silver Corp has no effect on the direction of SBM Offshore i.e., SBM Offshore and Summa Silver go up and down completely randomly.
Pair Corralation between SBM Offshore and Summa Silver
Assuming the 90 days horizon SBM Offshore NV is expected to generate 1.04 times more return on investment than Summa Silver. However, SBM Offshore is 1.04 times more volatile than Summa Silver Corp. It trades about 0.24 of its potential returns per unit of risk. Summa Silver Corp is currently generating about 0.03 per unit of risk. If you would invest 1,743 in SBM Offshore NV on November 29, 2024 and sell it today you would earn a total of 532.00 from holding SBM Offshore NV or generate 30.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SBM Offshore NV vs. Summa Silver Corp
Performance |
| Timeline |
| SBM Offshore NV |
| Summa Silver Corp |
SBM Offshore and Summa Silver Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SBM Offshore and Summa Silver
The main advantage of trading using opposite SBM Offshore and Summa Silver positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBM Offshore position performs unexpectedly, Summa Silver 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 Summa Silver will offset losses from the drop in Summa Silver's long position.| SBM Offshore vs. Expro Group Holdings | SBM Offshore vs. ChampionX | SBM Offshore vs. Ranger Energy Services | SBM Offshore vs. Cactus Inc |
| Summa Silver vs. P2 Gold | Summa Silver vs. Enduro Metals | Summa Silver vs. Kodiak Copper Corp | Summa Silver vs. Mirasol Resources |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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