Correlation Between SBM Offshore and Vienna Insurance
Can any of the company-specific risk be diversified away by investing in both SBM Offshore and Vienna Insurance 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 Vienna Insurance 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 Vienna Insurance Group, you can compare the effects of market volatilities on SBM Offshore and Vienna Insurance 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 Vienna Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBM Offshore and Vienna Insurance.
Diversification Opportunities for SBM Offshore and Vienna Insurance
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SBM and Vienna is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding SBM Offshore NV and Vienna Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vienna Insurance 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 Vienna Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vienna Insurance has no effect on the direction of SBM Offshore i.e., SBM Offshore and Vienna Insurance go up and down completely randomly.
Pair Corralation between SBM Offshore and Vienna Insurance
Assuming the 90 days trading horizon SBM Offshore NV is expected to generate 1.32 times more return on investment than Vienna Insurance. However, SBM Offshore is 1.32 times more volatile than Vienna Insurance Group. It trades about 0.22 of its potential returns per unit of risk. Vienna Insurance Group is currently generating about -0.24 per unit of risk. If you would invest 1,666 in SBM Offshore NV on August 24, 2024 and sell it today you would earn a total of 112.00 from holding SBM Offshore NV or generate 6.72% 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. Vienna Insurance Group
Performance |
| Timeline |
| SBM Offshore NV |
| Vienna Insurance |
SBM Offshore and Vienna Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SBM Offshore and Vienna Insurance
The main advantage of trading using opposite SBM Offshore and Vienna Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBM Offshore position performs unexpectedly, Vienna Insurance 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 Vienna Insurance will offset losses from the drop in Vienna Insurance's long position.| SBM Offshore vs. BKS Bank AG | SBM Offshore vs. Oberbank AG | SBM Offshore vs. UNIQA Insurance Group | SBM Offshore vs. Raiffeisen Bank International |
| Vienna Insurance vs. Erste Group Bank | Vienna Insurance vs. UNIQA Insurance Group | Vienna Insurance vs. Raiffeisen Bank International | Vienna Insurance vs. Voestalpine 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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