Correlation Between Mliuz SA and Sea

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

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

Diversification Opportunities for Mliuz SA and Sea

-0.49

Correlation Coefficient

Mliuz SA  Sea

Very good diversification

The 3 months correlation between Mliuz and Sea is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Mliuz SA and Sea Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sea Limited and Mliuz SA 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 Mliuz 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 Mliuz SA i.e., Mliuz SA and Sea go up and down completely randomly.

Pair Corralation between Mliuz SA and Sea

Assuming the 90 days trading horizon Mliuz SA is expected to under-perform the Sea. In addition to that, Mliuz SA is 2.67 times more volatile than Sea Limited. It trades about -0.22 of its total potential returns per unit of risk. Sea Limited is currently generating about -0.32 per unit of volatility. If you would invest  2,826  in Sea Limited on October 5, 2024 and sell it today you would lose (250.00) from holding Sea Limited or give up 8.85% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	94.74%
Values	Daily Returns

Mliuz SA  vs.  Sea Limited

Mliuz SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mliuz SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Sea Limited

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sea Limited are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical and fundamental indicators, Sea sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Mliuz SA and Sea

The main advantage of trading using opposite Mliuz SA and Sea positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mliuz SA 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.

The idea behind Mliuz SA and Sea Limited 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.