Correlation Between Roebuck Food and SBM Offshore

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

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

Diversification Opportunities for Roebuck Food and SBM Offshore

-0.27

Correlation Coefficient

Roebuck Food  SBM Offshore

Very good diversification

The 3 months correlation between Roebuck and SBM is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Roebuck Food 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 Roebuck Food 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 Roebuck Food 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 Roebuck Food i.e., Roebuck Food and SBM Offshore go up and down completely randomly.

Pair Corralation between Roebuck Food and SBM Offshore

Assuming the 90 days trading horizon Roebuck Food Group is expected to under-perform the SBM Offshore. But the stock apears to be less risky and, when comparing its historical volatility, Roebuck Food Group is 3.26 times less risky than SBM Offshore. The stock trades about -0.13 of its potential returns per unit of risk. The SBM Offshore NV is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest  1,773  in SBM Offshore NV on April 25, 2025 and sell it today you would earn a total of  530.00  from holding SBM Offshore NV or generate 29.89% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	93.55%
Values	Daily Returns

Roebuck Food Group  vs.  SBM Offshore NV

Roebuck Food Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Roebuck Food Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Roebuck Food is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

SBM Offshore NV

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in SBM Offshore NV are ranked lower than 28 (%) of all global equities and portfolios over the last 90 days. Despite quite uncertain essential indicators, SBM Offshore disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Roebuck Food and SBM Offshore

The main advantage of trading using opposite Roebuck Food and SBM Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Roebuck Food 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 Roebuck Food 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.

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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.