Correlation Between SBM Offshore and Aalberts Industries
Can any of the company-specific risk be diversified away by investing in both SBM Offshore and Aalberts Industries 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 Aalberts Industries 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 Aalberts Industries NV, you can compare the effects of market volatilities on SBM Offshore and Aalberts Industries 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 Aalberts Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBM Offshore and Aalberts Industries.
Diversification Opportunities for SBM Offshore and Aalberts Industries
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SBM and Aalberts is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding SBM Offshore NV and Aalberts Industries NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aalberts Industries 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 Aalberts Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aalberts Industries has no effect on the direction of SBM Offshore i.e., SBM Offshore and Aalberts Industries go up and down completely randomly.
Pair Corralation between SBM Offshore and Aalberts Industries
Assuming the 90 days trading horizon SBM Offshore NV is expected to generate 1.09 times more return on investment than Aalberts Industries. However, SBM Offshore is 1.09 times more volatile than Aalberts Industries NV. It trades about 0.18 of its potential returns per unit of risk. Aalberts Industries NV is currently generating about -0.01 per unit of risk. If you would invest 1,715 in SBM Offshore NV on November 3, 2024 and sell it today you would earn a total of 99.00 from holding SBM Offshore NV or generate 5.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SBM Offshore NV vs. Aalberts Industries NV
Performance |
| Timeline |
| SBM Offshore NV |
| Aalberts Industries |
SBM Offshore and Aalberts Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SBM Offshore and Aalberts Industries
The main advantage of trading using opposite SBM Offshore and Aalberts Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBM Offshore position performs unexpectedly, Aalberts Industries 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 Aalberts Industries will offset losses from the drop in Aalberts Industries' long position.| SBM Offshore vs. Fugro NV | SBM Offshore vs. Koninklijke Vopak NV | SBM Offshore vs. Randstad NV | SBM Offshore vs. Aalberts Industries NV |
| Aalberts Industries vs. TKH Group NV | Aalberts Industries vs. Koninklijke Vopak NV | Aalberts Industries vs. Randstad NV | Aalberts Industries vs. SBM Offshore NV |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |