Correlation Between Oesterr Post and SBM Offshore

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

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

Diversification Opportunities for Oesterr Post and SBM Offshore

-0.61

Correlation Coefficient

Oesterr Post  SBM Offshore

Excellent diversification

The 3 months correlation between Oesterr and SBM is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Oesterr Post AG 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 Oesterr Post 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 Oesterr Post AG 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 Oesterr Post i.e., Oesterr Post and SBM Offshore go up and down completely randomly.

Pair Corralation between Oesterr Post and SBM Offshore

Assuming the 90 days trading horizon Oesterr Post AG is expected to under-perform the SBM Offshore. But the stock apears to be less risky and, when comparing its historical volatility, Oesterr Post AG is 1.6 times less risky than SBM Offshore. The stock trades about -0.06 of its potential returns per unit of risk. The SBM Offshore NV is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  1,601  in SBM Offshore NV on September 12, 2024 and sell it today you would earn a total of  84.00  from holding SBM Offshore NV or generate 5.25% return on investment over 90 days.

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

Oesterr Post AG  vs.  SBM Offshore NV

Oesterr Post AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Oesterr Post AG has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward indicators, Oesterr Post 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

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in SBM Offshore NV are ranked lower than 5 (%) 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 Oesterr Post and SBM Offshore

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

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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.