Correlation Between ZOOZ Power and SBM Offshore

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

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

Diversification Opportunities for ZOOZ Power and SBM Offshore

-0.48

Correlation Coefficient

ZOOZ Power  SBM Offshore

Very good diversification

The 3 months correlation between ZOOZ and SBM is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding ZOOZ Power Ltd 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 ZOOZ Power 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 ZOOZ Power Ltd 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 ZOOZ Power i.e., ZOOZ Power and SBM Offshore go up and down completely randomly.

Pair Corralation between ZOOZ Power and SBM Offshore

Assuming the 90 days horizon ZOOZ Power Ltd is expected to under-perform the SBM Offshore. In addition to that, ZOOZ Power is 37.54 times more volatile than SBM Offshore NV. It trades about -0.01 of its total potential returns per unit of risk. SBM Offshore NV is currently generating about 0.24 per unit of volatility. If you would invest  1,700  in SBM Offshore NV on October 23, 2024 and sell it today you would earn a total of  43.00  from holding SBM Offshore NV or generate 2.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	77.78%
Values	Daily Returns

ZOOZ Power Ltd  vs.  SBM Offshore NV

ZOOZ Power

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ZOOZ Power Ltd are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent basic indicators, ZOOZ Power showed solid returns over the last few months and may actually be approaching a breakup point.

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.

Pair Trading with ZOOZ Power and SBM Offshore

The main advantage of trading using opposite ZOOZ Power and SBM Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ZOOZ Power 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 ZOOZ Power Ltd 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 CEOs Directory module to screen CEOs from public companies around the world.