Correlation Between SBM Offshore and Jutal Offshore

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

Diversification Opportunities for SBM Offshore and Jutal Offshore

-0.73

Correlation Coefficient

SBM Offshore  Jutal Offshore

Pay attention - limited upside

The 3 months correlation between SBM and Jutal is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding SBM Offshore NV and Jutal Offshore Oil in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jutal Offshore Oil 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 Jutal Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jutal Offshore Oil has no effect on the direction of SBM Offshore i.e., SBM Offshore and Jutal Offshore go up and down completely randomly.

Pair Corralation between SBM Offshore and Jutal Offshore

If you would invest  1,574  in SBM Offshore NV on January 29, 2024 and sell it today you would lose (17.00) from holding SBM Offshore NV or give up 1.08% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

SBM Offshore NV  vs.  Jutal Offshore Oil

SBM Offshore NV

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SBM Offshore NV are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent technical and fundamental indicators, SBM Offshore showed solid returns over the last few months and may actually be approaching a breakup point.

Jutal Offshore Oil

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jutal Offshore Oil has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with SBM Offshore and Jutal Offshore

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

The idea behind SBM Offshore NV and Jutal Offshore Oil 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.