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

SBM Offshore  BenevolentAI

Modest 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 0.23 times more return on investment than BenevolentAI. However, SBM Offshore NV is 4.3 times less risky than BenevolentAI. It trades about 0.0 of its potential returns per unit of risk. BenevolentAI SA is currently generating about -0.11 per unit of risk. If you would invest  1,651  in SBM Offshore NV on September 19, 2024 and sell it today you would lose (12.00) from holding SBM Offshore NV or give up 0.73% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.46%
Values	Daily Returns

SBM Offshore NV  vs.  BenevolentAI SA

SBM Offshore NV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SBM Offshore NV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, SBM Offshore is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

BenevolentAI SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BenevolentAI SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's forward indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

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.

The idea behind SBM Offshore NV and BenevolentAI SA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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.