Correlation Between FIRST MUTUAL and SEED

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

By analyzing existing cross correlation between FIRST MUTUAL PROPERTIES and SEED LIMITED, you can compare the effects of market volatilities on FIRST MUTUAL and SEED 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 FIRST MUTUAL with a short position of SEED. Check out your portfolio center. Please also check ongoing floating volatility patterns of FIRST MUTUAL and SEED.

Diversification Opportunities for FIRST MUTUAL and SEED

-0.74

Correlation Coefficient

FIRST MUTUAL  SEED

Pay attention - limited upside

The 3 months correlation between FIRST and SEED is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding FIRST MUTUAL PROPERTIES and SEED LIMITED in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEED LIMITED and FIRST MUTUAL 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 FIRST MUTUAL PROPERTIES are associated (or correlated) with SEED. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEED LIMITED has no effect on the direction of FIRST MUTUAL i.e., FIRST MUTUAL and SEED go up and down completely randomly.

Pair Corralation between FIRST MUTUAL and SEED

Assuming the 90 days trading horizon FIRST MUTUAL PROPERTIES is expected to under-perform the SEED. But the stock apears to be less risky and, when comparing its historical volatility, FIRST MUTUAL PROPERTIES is 2.51 times less risky than SEED. The stock trades about -0.2 of its potential returns per unit of risk. The SEED LIMITED is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  27,003  in SEED LIMITED on December 21, 2024 and sell it today you would earn a total of  15,997  from holding SEED LIMITED or generate 59.24% return on investment over 90 days.

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

FIRST MUTUAL PROPERTIES  vs.  SEED LIMITED

FIRST MUTUAL PROPERTIES

Risk-Adjusted Performance

Very Weak

Over the last 90 days FIRST MUTUAL PROPERTIES has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's forward indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

SEED LIMITED

Risk-Adjusted Performance

Good

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

Pair Trading with FIRST MUTUAL and SEED

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

The idea behind FIRST MUTUAL PROPERTIES and SEED 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 Commodity Directory module to find actively traded commodities issued by global exchanges.