Correlation Between SBM Offshore and Fielmann Aktiengesellscha

Can any of the company-specific risk be diversified away by investing in both SBM Offshore and Fielmann Aktiengesellscha 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 Fielmann Aktiengesellscha 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 Fielmann Aktiengesellschaft, you can compare the effects of market volatilities on SBM Offshore and Fielmann Aktiengesellscha 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 Fielmann Aktiengesellscha. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBM Offshore and Fielmann Aktiengesellscha.

Diversification Opportunities for SBM Offshore and Fielmann Aktiengesellscha

0.0

Correlation Coefficient

SBM Offshore  Fielmann Aktiengesellscha

Pay attention - limited upside

The 3 months correlation between SBM and Fielmann is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SBM Offshore NV and Fielmann Aktiengesellschaft in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fielmann Aktiengesellscha 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 Fielmann Aktiengesellscha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fielmann Aktiengesellscha has no effect on the direction of SBM Offshore i.e., SBM Offshore and Fielmann Aktiengesellscha go up and down completely randomly.

Pair Corralation between SBM Offshore and Fielmann Aktiengesellscha

If you would invest  1,700  in SBM Offshore NV on December 21, 2024 and sell it today you would earn a total of  575.00  from holding SBM Offshore NV or generate 33.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

SBM Offshore NV  vs.  Fielmann Aktiengesellschaft

SBM Offshore NV

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SBM Offshore NV are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak technical and fundamental indicators, SBM Offshore showed solid returns over the last few months and may actually be approaching a breakup point.

Fielmann Aktiengesellscha

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fielmann Aktiengesellschaft has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound forward indicators, Fielmann Aktiengesellscha is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with SBM Offshore and Fielmann Aktiengesellscha

The main advantage of trading using opposite SBM Offshore and Fielmann Aktiengesellscha positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBM Offshore position performs unexpectedly, Fielmann Aktiengesellscha 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 Fielmann Aktiengesellscha will offset losses from the drop in Fielmann Aktiengesellscha's long position.

The idea behind SBM Offshore NV and Fielmann Aktiengesellschaft 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.