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

0.75

Correlation Coefficient

Semperit Aktiengesellscha  SBM Offshore

Poor diversification

The 3 months correlation between Semperit and SBM is 0.75. 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 Aktiengesellschaft Holding is expected to generate 0.78 times more return on investment than SBM Offshore. However, Semperit Aktiengesellschaft Holding is 1.29 times less risky than SBM Offshore. It trades about 0.24 of its potential returns per unit of risk. SBM Offshore NV is currently generating about 0.15 per unit of risk. If you would invest  1,184  in Semperit Aktiengesellschaft Holding on December 29, 2024 and sell it today you would earn a total of  316.00  from holding Semperit Aktiengesellschaft Holding or generate 26.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

Semperit Aktiengesellschaft Ho  vs.  SBM Offshore NV

Semperit Aktiengesellscha

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Semperit Aktiengesellschaft Holding are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent primary indicators, Semperit Aktiengesellscha demonstrated solid returns over the last few months and may actually be approaching a breakup point.

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 11 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, SBM Offshore demonstrated solid returns over the last few months and may actually be approaching a breakup point.

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.

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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.