Correlation Between SBM Offshore and AMAG Austria
Can any of the company-specific risk be diversified away by investing in both SBM Offshore and AMAG Austria 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 AMAG Austria 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 AMAG Austria Metall, you can compare the effects of market volatilities on SBM Offshore and AMAG Austria 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 AMAG Austria. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBM Offshore and AMAG Austria.
Diversification Opportunities for SBM Offshore and AMAG Austria
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SBM and AMAG is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding SBM Offshore NV and AMAG Austria Metall in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMAG Austria Metall 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 AMAG Austria. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMAG Austria Metall has no effect on the direction of SBM Offshore i.e., SBM Offshore and AMAG Austria go up and down completely randomly.
Pair Corralation between SBM Offshore and AMAG Austria
Assuming the 90 days trading horizon SBM Offshore NV is expected to generate 1.67 times more return on investment than AMAG Austria. However, SBM Offshore is 1.67 times more volatile than AMAG Austria Metall. It trades about 0.24 of its potential returns per unit of risk. AMAG Austria Metall is currently generating about -0.4 per unit of risk. If you would invest 1,653 in SBM Offshore NV on August 27, 2024 and sell it today you would earn a total of 109.00 from holding SBM Offshore NV or generate 6.59% 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. AMAG Austria Metall
Performance |
| Timeline |
| SBM Offshore NV |
| AMAG Austria Metall |
SBM Offshore and AMAG Austria Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SBM Offshore and AMAG Austria
The main advantage of trading using opposite SBM Offshore and AMAG Austria positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBM Offshore position performs unexpectedly, AMAG Austria 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 AMAG Austria will offset losses from the drop in AMAG Austria's long position.| SBM Offshore vs. Semperit Aktiengesellschaft Holding | SBM Offshore vs. Oesterr Post AG | SBM Offshore vs. Voestalpine AG | SBM Offshore vs. Universal Music Group |
| AMAG Austria vs. Lenzing Aktiengesellschaft | AMAG Austria vs. Voestalpine AG | AMAG Austria vs. EVN AG | AMAG Austria vs. Facc AG |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |