Correlation Between Brockhaus Capital and SEAZEN GROUP

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

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

Diversification Opportunities for Brockhaus Capital and SEAZEN GROUP

-0.59

Correlation Coefficient

Brockhaus Capital  SEAZEN GROUP

Excellent diversification

The 3 months correlation between Brockhaus and SEAZEN is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Brockhaus Capital Management and SEAZEN GROUP LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEAZEN GROUP LTD and Brockhaus Capital 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 Brockhaus Capital Management are associated (or correlated) with SEAZEN GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEAZEN GROUP LTD has no effect on the direction of Brockhaus Capital i.e., Brockhaus Capital and SEAZEN GROUP go up and down completely randomly.

Pair Corralation between Brockhaus Capital and SEAZEN GROUP

Assuming the 90 days trading horizon Brockhaus Capital Management is expected to under-perform the SEAZEN GROUP. In addition to that, Brockhaus Capital is 1.04 times more volatile than SEAZEN GROUP LTD. It trades about -0.1 of its total potential returns per unit of risk. SEAZEN GROUP LTD is currently generating about 0.06 per unit of volatility. If you would invest  22.00  in SEAZEN GROUP LTD on December 28, 2024 and sell it today you would earn a total of  2.00  from holding SEAZEN GROUP LTD or generate 9.09% return on investment over 90 days.

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

Brockhaus Capital Management  vs.  SEAZEN GROUP LTD

Brockhaus Capital

Risk-Adjusted Performance

Very Weak

Over the last 90 days Brockhaus Capital Management has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's technical indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

SEAZEN GROUP LTD

Risk-Adjusted Performance

Insignificant

Over the last 90 days SEAZEN GROUP LTD has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly weak essential indicators, SEAZEN GROUP may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Brockhaus Capital and SEAZEN GROUP

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

The idea behind Brockhaus Capital Management and SEAZEN GROUP LTD 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.