Correlation Between SBM Offshore and IShares MSCI

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

Diversification Opportunities for SBM Offshore and IShares MSCI

0.0

Correlation Coefficient

SBM Offshore  IShares MSCI

Pay attention - limited upside

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

Pair Corralation between SBM Offshore and IShares MSCI

If you would invest  39.00  in iShares MSCI on September 17, 2024 and sell it today you would earn a total of  0.00  from holding iShares MSCI or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

SBM Offshore NV  vs.  iShares MSCI

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 fairly strong technical and fundamental indicators, SBM Offshore is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

iShares MSCI

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days iShares MSCI has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable primary indicators, IShares MSCI is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with SBM Offshore and IShares MSCI

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

The idea behind SBM Offshore NV and iShares MSCI 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.