Correlation Between SBM Offshore and BenevolentAI
Can any of the company-specific risk be diversified away by investing in both SBM Offshore and BenevolentAI 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 BenevolentAI 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 BenevolentAI SA, you can compare the effects of market volatilities on SBM Offshore and BenevolentAI 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 BenevolentAI. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBM Offshore and BenevolentAI.
Diversification Opportunities for SBM Offshore and BenevolentAI
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between SBM and BenevolentAI is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding SBM Offshore NV and BenevolentAI SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BenevolentAI SA 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 BenevolentAI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BenevolentAI SA has no effect on the direction of SBM Offshore i.e., SBM Offshore and BenevolentAI go up and down completely randomly.
Pair Corralation between SBM Offshore and BenevolentAI
Assuming the 90 days trading horizon SBM Offshore NV is expected to generate 0.61 times more return on investment than BenevolentAI. However, SBM Offshore NV is 1.63 times less risky than BenevolentAI. It trades about 0.26 of its potential returns per unit of risk. BenevolentAI SA is currently generating about -0.19 per unit of risk. If you would invest 1,659 in SBM Offshore NV on August 24, 2024 and sell it today you would earn a total of 143.00 from holding SBM Offshore NV or generate 8.62% 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. BenevolentAI SA
Performance |
| Timeline |
| SBM Offshore NV |
| BenevolentAI SA |
SBM Offshore and BenevolentAI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SBM Offshore and BenevolentAI
The main advantage of trading using opposite SBM Offshore and BenevolentAI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBM Offshore position performs unexpectedly, BenevolentAI 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 BenevolentAI will offset losses from the drop in BenevolentAI's long position.| SBM Offshore vs. Fugro NV | SBM Offshore vs. Koninklijke Vopak NV | SBM Offshore vs. Randstad NV | SBM Offshore vs. Aalberts Industries NV |
| BenevolentAI vs. Galapagos NV | BenevolentAI vs. Koninklijke BAM Groep | BenevolentAI vs. Fugro NV | BenevolentAI vs. PostNL 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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