Correlation Between SBM Offshore and Sligro Food
Can any of the company-specific risk be diversified away by investing in both SBM Offshore and Sligro Food 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 Sligro Food 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 Sligro Food Group, you can compare the effects of market volatilities on SBM Offshore and Sligro Food 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 Sligro Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBM Offshore and Sligro Food.
Diversification Opportunities for SBM Offshore and Sligro Food
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SBM and Sligro is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding SBM Offshore NV and Sligro Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sligro Food Group 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 Sligro Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sligro Food Group has no effect on the direction of SBM Offshore i.e., SBM Offshore and Sligro Food go up and down completely randomly.
Pair Corralation between SBM Offshore and Sligro Food
Assuming the 90 days trading horizon SBM Offshore NV is expected to generate 1.17 times more return on investment than Sligro Food. However, SBM Offshore is 1.17 times more volatile than Sligro Food Group. It trades about 0.04 of its potential returns per unit of risk. Sligro Food Group is currently generating about -0.05 per unit of risk. If you would invest 1,316 in SBM Offshore NV on September 4, 2024 and sell it today you would earn a total of 364.00 from holding SBM Offshore NV or generate 27.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SBM Offshore NV vs. Sligro Food Group
Performance |
| Timeline |
| SBM Offshore NV |
| Sligro Food Group |
SBM Offshore and Sligro Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SBM Offshore and Sligro Food
The main advantage of trading using opposite SBM Offshore and Sligro Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBM Offshore position performs unexpectedly, Sligro Food 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 Sligro Food will offset losses from the drop in Sligro Food'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 |
| Sligro Food vs. TKH Group NV | Sligro Food vs. Brunel International NV | Sligro Food vs. Koninklijke BAM Groep | Sligro Food vs. Koninklijke Vopak 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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