Correlation Between SBM Offshore and Tesla
Can any of the company-specific risk be diversified away by investing in both SBM Offshore and Tesla 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 Tesla 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 Tesla Inc, you can compare the effects of market volatilities on SBM Offshore and Tesla 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 Tesla. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBM Offshore and Tesla.
Diversification Opportunities for SBM Offshore and Tesla
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SBM and Tesla is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding SBM Offshore NV and Tesla Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tesla Inc 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 Tesla. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tesla Inc has no effect on the direction of SBM Offshore i.e., SBM Offshore and Tesla go up and down completely randomly.
Pair Corralation between SBM Offshore and Tesla
Assuming the 90 days horizon SBM Offshore is expected to generate 1.23 times less return on investment than Tesla. In addition to that, SBM Offshore is 1.34 times more volatile than Tesla Inc. It trades about 0.03 of its total potential returns per unit of risk. Tesla Inc is currently generating about 0.06 per unit of volatility. If you would invest 16,782 in Tesla Inc on September 2, 2024 and sell it today you would earn a total of 17,734 from holding Tesla Inc or generate 105.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 72.38% |
| Values | Daily Returns |
SBM Offshore NV vs. Tesla Inc
Performance |
| Timeline |
| SBM Offshore NV |
| Tesla Inc |
SBM Offshore and Tesla Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SBM Offshore and Tesla
The main advantage of trading using opposite SBM Offshore and Tesla positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBM Offshore position performs unexpectedly, Tesla 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 Tesla will offset losses from the drop in Tesla'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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |