Correlation Between SBM Offshore and Valneva SE
Can any of the company-specific risk be diversified away by investing in both SBM Offshore and Valneva SE 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 Valneva SE 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 Valneva SE ADR, you can compare the effects of market volatilities on SBM Offshore and Valneva SE 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 Valneva SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBM Offshore and Valneva SE.
Diversification Opportunities for SBM Offshore and Valneva SE
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SBM and Valneva is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding SBM Offshore NV and Valneva SE ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Valneva SE ADR 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 Valneva SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Valneva SE ADR has no effect on the direction of SBM Offshore i.e., SBM Offshore and Valneva SE go up and down completely randomly.
Pair Corralation between SBM Offshore and Valneva SE
Assuming the 90 days horizon SBM Offshore NV is expected to generate 0.68 times more return on investment than Valneva SE. However, SBM Offshore NV is 1.47 times less risky than Valneva SE. It trades about 0.11 of its potential returns per unit of risk. Valneva SE ADR is currently generating about -0.11 per unit of risk. If you would invest 1,211 in SBM Offshore NV on September 1, 2024 and sell it today you would earn a total of 669.00 from holding SBM Offshore NV or generate 55.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 71.0% |
| Values | Daily Returns |
SBM Offshore NV vs. Valneva SE ADR
Performance |
| Timeline |
| SBM Offshore NV |
| Valneva SE ADR |
SBM Offshore and Valneva SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SBM Offshore and Valneva SE
The main advantage of trading using opposite SBM Offshore and Valneva SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBM Offshore position performs unexpectedly, Valneva SE 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 Valneva SE will offset losses from the drop in Valneva SE's long position.| SBM Offshore vs. Expro Group Holdings | SBM Offshore vs. ChampionX | SBM Offshore vs. Ranger Energy Services | SBM Offshore vs. Cactus Inc |
| Valneva SE vs. NuCana PLC | Valneva SE vs. Sage Therapeutic | Valneva SE vs. Sellas Life Sciences | Valneva SE vs. Third Harmonic Bio |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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