Correlation Between Caravelle International and Sea

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Can any of the company-specific risk be diversified away by investing in both Caravelle International 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 Caravelle International and Sea into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Caravelle International Group and Sea, you can compare the effects of market volatilities on Caravelle International 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 Caravelle International with a short position of Sea. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caravelle International and Sea.

Diversification Opportunities for Caravelle International and Sea

CaravelleSeaDiversified AwayCaravelleSeaDiversified Away100%
0.3
  Correlation Coefficient

Weak diversification

The 3 months correlation between Caravelle and Sea is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Caravelle International Group and Sea in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sea and Caravelle International 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 Caravelle International Group 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 has no effect on the direction of Caravelle International i.e., Caravelle International and Sea go up and down completely randomly.

Pair Corralation between Caravelle International and Sea

Given the investment horizon of 90 days Caravelle International Group is expected to generate 5.81 times more return on investment than Sea. However, Caravelle International is 5.81 times more volatile than Sea. It trades about 0.19 of its potential returns per unit of risk. Sea is currently generating about 0.2 per unit of risk. If you would invest  124.00  in Caravelle International Group on November 18, 2024 and sell it today you would earn a total of  203.00  from holding Caravelle International Group or generate 163.71% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Caravelle International Group  vs.  Sea

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb 050100150200250
JavaScript chart by amCharts 3.21.15HTCO SE
       Timeline  
Caravelle International 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Caravelle International Group are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal fundamental indicators, Caravelle International displayed solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb1.522.533.544.5
Sea 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Sea are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Sea exhibited solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb105110115120125130135

Caravelle International and Sea Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-32.33-24.21-16.1-7.980.08.6317.5726.535.4344.36 0.010.020.030.040.050.060.07
JavaScript chart by amCharts 3.21.15HTCO SE
       Returns  

Pair Trading with Caravelle International and Sea

The main advantage of trading using opposite Caravelle International and Sea positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caravelle International 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 Caravelle International Group and Sea 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.
Check out your portfolio center.
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.

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