Correlation Between SBM Offshore and Expro Group
Can any of the company-specific risk be diversified away by investing in both SBM Offshore and Expro Group 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 Expro Group 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 Expro Group Holdings, you can compare the effects of market volatilities on SBM Offshore and Expro Group 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 Expro Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBM Offshore and Expro Group.
Diversification Opportunities for SBM Offshore and Expro Group
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SBM and Expro is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding SBM Offshore NV and Expro Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Expro Group Holdings 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 Expro Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Expro Group Holdings has no effect on the direction of SBM Offshore i.e., SBM Offshore and Expro Group go up and down completely randomly.
Pair Corralation between SBM Offshore and Expro Group
Assuming the 90 days horizon SBM Offshore NV is expected to generate 1.78 times more return on investment than Expro Group. However, SBM Offshore is 1.78 times more volatile than Expro Group Holdings. It trades about 0.04 of its potential returns per unit of risk. Expro Group Holdings is currently generating about 0.0 per unit of risk. If you would invest 1,491 in SBM Offshore NV on August 25, 2024 and sell it today you would earn a total of 389.00 from holding SBM Offshore NV or generate 26.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 72.38% |
| Values | Daily Returns |
SBM Offshore NV vs. Expro Group Holdings
Performance |
| Timeline |
| SBM Offshore NV |
| Expro Group Holdings |
SBM Offshore and Expro Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SBM Offshore and Expro Group
The main advantage of trading using opposite SBM Offshore and Expro Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBM Offshore position performs unexpectedly, Expro Group 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 Expro Group will offset losses from the drop in Expro Group's long position.| SBM Offshore vs. Expro Group Holdings | SBM Offshore vs. ChampionX | SBM Offshore vs. Ranger Energy Services | SBM Offshore vs. Cactus Inc |
| Expro Group vs. ChampionX | Expro Group vs. Ranger Energy Services | Expro Group vs. Cactus Inc | Expro Group vs. MRC Global |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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