Correlation Between GAMING FAC and Sea
Can any of the company-specific risk be diversified away by investing in both GAMING FAC and Sea 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 GAMING FAC and Sea into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GAMING FAC SA and Sea Limited, you can compare the effects of market volatilities on GAMING FAC and Sea 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 GAMING FAC with a short position of Sea. Check out your portfolio center. Please also check ongoing floating volatility patterns of GAMING FAC and Sea.
Diversification Opportunities for GAMING FAC and Sea
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GAMING and Sea is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding GAMING FAC SA and Sea Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sea Limited and GAMING FAC 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 GAMING FAC SA are associated (or correlated) with Sea. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sea Limited has no effect on the direction of GAMING FAC i.e., GAMING FAC and Sea go up and down completely randomly.
Pair Corralation between GAMING FAC and Sea
Assuming the 90 days horizon GAMING FAC SA is expected to under-perform the Sea. In addition to that, GAMING FAC is 1.57 times more volatile than Sea Limited. It trades about -0.06 of its total potential returns per unit of risk. Sea Limited is currently generating about 0.27 per unit of volatility. If you would invest 7,160 in Sea Limited on September 2, 2024 and sell it today you would earn a total of 3,540 from holding Sea Limited or generate 49.44% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
GAMING FAC SA vs. Sea Limited
Performance |
Timeline |
GAMING FAC SA |
Sea Limited |
GAMING FAC and Sea Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with GAMING FAC and Sea
The main advantage of trading using opposite GAMING FAC and Sea positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GAMING FAC position performs unexpectedly, Sea 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 Sea will offset losses from the drop in Sea's long position.GAMING FAC vs. Nintendo Co | GAMING FAC vs. Sea Limited | GAMING FAC vs. Superior Plus Corp | GAMING FAC vs. NMI Holdings |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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