Correlation Between Avis Budget and Semco Energy

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

By analyzing existing cross correlation between Avis Budget Group and Semco Energy, you can compare the effects of market volatilities on Avis Budget and Semco Energy 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 Avis Budget with a short position of Semco Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avis Budget and Semco Energy.

Diversification Opportunities for Avis Budget and Semco Energy

0.0

Correlation Coefficient

Avis Budget  Semco Energy

Pay attention - limited upside

The 3 months correlation between Avis and Semco is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Avis Budget Group and Semco Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Semco Energy and Avis Budget 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 Avis Budget Group are associated (or correlated) with Semco Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Semco Energy has no effect on the direction of Avis Budget i.e., Avis Budget and Semco Energy go up and down completely randomly.

Pair Corralation between Avis Budget and Semco Energy

If you would invest (100.00) in Semco Energy on December 25, 2024 and sell it today you would earn a total of  100.00  from holding Semco Energy or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Avis Budget Group  vs.  Semco Energy

Avis Budget Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Avis Budget Group has generated negative risk-adjusted returns adding no value to investors with long positions. Even with abnormal performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Semco Energy

Risk-Adjusted Performance

Very Weak

Over the last 90 days Semco Energy has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, Semco Energy is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Avis Budget and Semco Energy

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

The idea behind Avis Budget Group and Semco Energy 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.