Correlation Between Semperit Aktiengesellscha and SBM Offshore

Can any of the company-specific risk be diversified away by investing in both Semperit Aktiengesellscha 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 Semperit Aktiengesellscha and SBM Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Semperit Aktiengesellschaft Holding and SBM Offshore NV, you can compare the effects of market volatilities on Semperit Aktiengesellscha 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 Semperit Aktiengesellscha with a short position of SBM Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Semperit Aktiengesellscha and SBM Offshore.

Diversification Opportunities for Semperit Aktiengesellscha and SBM Offshore

-0.45

Correlation Coefficient

Semperit Aktiengesellscha  SBM Offshore

Very good diversification

The 3 months correlation between Semperit and SBM is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Semperit Aktiengesellschaft Ho and SBM Offshore NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SBM Offshore NV and Semperit Aktiengesellscha 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 Semperit Aktiengesellschaft Holding 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 NV has no effect on the direction of Semperit Aktiengesellscha i.e., Semperit Aktiengesellscha and SBM Offshore go up and down completely randomly.

Pair Corralation between Semperit Aktiengesellscha and SBM Offshore

Assuming the 90 days trading horizon Semperit Aktiengesellscha is expected to generate 1.85 times less return on investment than SBM Offshore. In addition to that, Semperit Aktiengesellscha is 1.08 times more volatile than SBM Offshore NV. It trades about 0.01 of its total potential returns per unit of risk. SBM Offshore NV is currently generating about 0.02 per unit of volatility. If you would invest  1,646  in SBM Offshore NV on September 23, 2024 and sell it today you would earn a total of  24.00  from holding SBM Offshore NV or generate 1.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Semperit Aktiengesellschaft Ho  vs.  SBM Offshore NV

Semperit Aktiengesellscha

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Semperit Aktiengesellschaft Holding has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong primary indicators, Semperit Aktiengesellscha is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

SBM Offshore NV

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SBM Offshore NV are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong forward indicators, SBM Offshore is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Semperit Aktiengesellscha and SBM Offshore

The main advantage of trading using opposite Semperit Aktiengesellscha and SBM Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Semperit Aktiengesellscha 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.

The idea behind Semperit Aktiengesellschaft Holding and SBM Offshore NV 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.

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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.