Correlation Between SBM Offshore and Banco Bilbao

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

Diversification Opportunities for SBM Offshore and Banco Bilbao

0.0

Correlation Coefficient

SBM Offshore  Banco Bilbao

Pay attention - limited upside

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

Pair Corralation between SBM Offshore and Banco Bilbao

If you would invest  1,659  in SBM Offshore NV on October 23, 2024 and sell it today you would earn a total of  159.00  from holding SBM Offshore NV or generate 9.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.64%
Values	Daily Returns

SBM Offshore NV  vs.  Banco Bilbao Vizcaya

SBM Offshore NV

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SBM Offshore NV are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, SBM Offshore may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Banco Bilbao Vizcaya

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Banco Bilbao Vizcaya has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable fundamental drivers, Banco Bilbao is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with SBM Offshore and Banco Bilbao

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

The idea behind SBM Offshore NV and Banco Bilbao Vizcaya 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 Stocks Directory module to find actively traded stocks across global markets.