Correlation Between Converge Technology and SEATech Ventures

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

By analyzing existing cross correlation between Converge Technology Solutions and SEATech Ventures Corp, you can compare the effects of market volatilities on Converge Technology and SEATech Ventures 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 Converge Technology with a short position of SEATech Ventures. Check out your portfolio center. Please also check ongoing floating volatility patterns of Converge Technology and SEATech Ventures.

Diversification Opportunities for Converge Technology and SEATech Ventures

-0.28

Correlation Coefficient

Converge Technology  SEATech Ventures

Very good diversification

The 3 months correlation between Converge and SEATech is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Converge Technology Solutions and SEATech Ventures Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEATech Ventures Corp and Converge Technology 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 Converge Technology Solutions are associated (or correlated) with SEATech Ventures. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEATech Ventures Corp has no effect on the direction of Converge Technology i.e., Converge Technology and SEATech Ventures go up and down completely randomly.

Pair Corralation between Converge Technology and SEATech Ventures

Assuming the 90 days horizon Converge Technology Solutions is expected to generate 1.35 times more return on investment than SEATech Ventures. However, Converge Technology is 1.35 times more volatile than SEATech Ventures Corp. It trades about 0.15 of its potential returns per unit of risk. SEATech Ventures Corp is currently generating about -0.06 per unit of risk. If you would invest  226.00  in Converge Technology Solutions on December 27, 2024 and sell it today you would earn a total of  156.00  from holding Converge Technology Solutions or generate 69.03% return on investment over 90 days.

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

Converge Technology Solutions  vs.  SEATech Ventures Corp

Converge Technology

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Converge Technology Solutions are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak fundamental indicators, Converge Technology reported solid returns over the last few months and may actually be approaching a breakup point.

SEATech Ventures Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days SEATech Ventures Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Converge Technology and SEATech Ventures

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

The idea behind Converge Technology Solutions and SEATech Ventures Corp 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.