Correlation Between Tetragon Financial and SBM Offshore
Can any of the company-specific risk be diversified away by investing in both Tetragon Financial 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 Tetragon Financial and SBM Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tetragon Financial Group and SBM Offshore NV, you can compare the effects of market volatilities on Tetragon Financial 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 Tetragon Financial with a short position of SBM Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tetragon Financial and SBM Offshore.
Diversification Opportunities for Tetragon Financial and SBM Offshore
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Tetragon and SBM is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Tetragon Financial Group 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 Tetragon Financial 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 Tetragon Financial Group 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 Tetragon Financial i.e., Tetragon Financial and SBM Offshore go up and down completely randomly.
Pair Corralation between Tetragon Financial and SBM Offshore
Assuming the 90 days trading horizon Tetragon Financial Group is expected to under-perform the SBM Offshore. But the stock apears to be less risky and, when comparing its historical volatility, Tetragon Financial Group is 1.78 times less risky than SBM Offshore. The stock trades about -0.17 of its potential returns per unit of risk. The SBM Offshore NV is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 2,176 in SBM Offshore NV on October 9, 2025 and sell it today you would earn a total of 318.00 from holding SBM Offshore NV or generate 14.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tetragon Financial Group vs. SBM Offshore NV
Performance |
| Timeline |
| Tetragon Financial |
| SBM Offshore NV |
Tetragon Financial and SBM Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tetragon Financial and SBM Offshore
The main advantage of trading using opposite Tetragon Financial and SBM Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tetragon Financial 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 Tetragon Financial Group 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.| SBM Offshore vs. Aalberts Industries NV | SBM Offshore vs. Fugro NV | SBM Offshore vs. Randstad NV | SBM Offshore vs. Koninklijke Vopak NV |
Check out your portfolio center.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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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