Correlation Between SEKISUI CHEMICAL and SBM OFFSHORE
Can any of the company-specific risk be diversified away by investing in both SEKISUI CHEMICAL and SBM OFFSHORE 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 SEKISUI CHEMICAL and SBM OFFSHORE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SEKISUI CHEMICAL and SBM OFFSHORE, you can compare the effects of market volatilities on SEKISUI CHEMICAL and SBM OFFSHORE 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 SEKISUI CHEMICAL with a short position of SBM OFFSHORE. Check out your portfolio center. Please also check ongoing floating volatility patterns of SEKISUI CHEMICAL and SBM OFFSHORE.
Diversification Opportunities for SEKISUI CHEMICAL and SBM OFFSHORE
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between SEKISUI and SBM is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding SEKISUI CHEMICAL and SBM OFFSHORE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SBM OFFSHORE and SEKISUI CHEMICAL 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 SEKISUI CHEMICAL are associated (or correlated) with SBM OFFSHORE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SBM OFFSHORE has no effect on the direction of SEKISUI CHEMICAL i.e., SEKISUI CHEMICAL and SBM OFFSHORE go up and down completely randomly.
Pair Corralation between SEKISUI CHEMICAL and SBM OFFSHORE
Assuming the 90 days trading horizon SEKISUI CHEMICAL is expected to generate 0.84 times more return on investment than SBM OFFSHORE. However, SEKISUI CHEMICAL is 1.2 times less risky than SBM OFFSHORE. It trades about 0.13 of its potential returns per unit of risk. SBM OFFSHORE is currently generating about -0.07 per unit of risk. If you would invest 1,420 in SEKISUI CHEMICAL on September 14, 2024 and sell it today you would earn a total of 60.00 from holding SEKISUI CHEMICAL or generate 4.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SEKISUI CHEMICAL vs. SBM OFFSHORE
Performance |
| Timeline |
| SEKISUI CHEMICAL |
| SBM OFFSHORE |
SEKISUI CHEMICAL and SBM OFFSHORE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SEKISUI CHEMICAL and SBM OFFSHORE
The main advantage of trading using opposite SEKISUI CHEMICAL and SBM OFFSHORE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SEKISUI CHEMICAL position performs unexpectedly, SBM OFFSHORE 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 SBM OFFSHORE will offset losses from the drop in SBM OFFSHORE's long position.| SEKISUI CHEMICAL vs. Wayside Technology Group | SEKISUI CHEMICAL vs. PKSHA TECHNOLOGY INC | SEKISUI CHEMICAL vs. SIEM OFFSHORE NEW | SEKISUI CHEMICAL vs. Columbia Sportswear |
| SBM OFFSHORE vs. Apple Inc | SBM OFFSHORE vs. Apple Inc | SBM OFFSHORE vs. Apple Inc | SBM OFFSHORE vs. Apple Inc |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
Other Complementary Tools
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |