Correlation Between SEAZEN GROUP and CEOTRONICS

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

By analyzing existing cross correlation between SEAZEN GROUP LTD and CEOTRONICS, you can compare the effects of market volatilities on SEAZEN GROUP and CEOTRONICS 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 SEAZEN GROUP with a short position of CEOTRONICS. Check out your portfolio center. Please also check ongoing floating volatility patterns of SEAZEN GROUP and CEOTRONICS.

Diversification Opportunities for SEAZEN GROUP and CEOTRONICS

-0.16

Correlation Coefficient

SEAZEN GROUP  CEOTRONICS

Good diversification

The 3 months correlation between SEAZEN and CEOTRONICS is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding SEAZEN GROUP LTD and CEOTRONICS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CEOTRONICS and SEAZEN GROUP 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 SEAZEN GROUP LTD are associated (or correlated) with CEOTRONICS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CEOTRONICS has no effect on the direction of SEAZEN GROUP i.e., SEAZEN GROUP and CEOTRONICS go up and down completely randomly.

Pair Corralation between SEAZEN GROUP and CEOTRONICS

Assuming the 90 days trading horizon SEAZEN GROUP is expected to generate 10.54 times less return on investment than CEOTRONICS. But when comparing it to its historical volatility, SEAZEN GROUP LTD is 1.45 times less risky than CEOTRONICS. It trades about 0.02 of its potential returns per unit of risk. CEOTRONICS is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  520.00  in CEOTRONICS on September 24, 2024 and sell it today you would earn a total of  50.00  from holding CEOTRONICS or generate 9.62% return on investment over 90 days.

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

SEAZEN GROUP LTD  vs.  CEOTRONICS

SEAZEN GROUP LTD

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in SEAZEN GROUP LTD are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain essential indicators, SEAZEN GROUP reported solid returns over the last few months and may actually be approaching a breakup point.

CEOTRONICS

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in CEOTRONICS are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, CEOTRONICS unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SEAZEN GROUP and CEOTRONICS

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

The idea behind SEAZEN GROUP LTD and CEOTRONICS 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.