Correlation Between Caravelle International and SEACOR Marine

Can any of the company-specific risk be diversified away by investing in both Caravelle International and SEACOR Marine 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 SEACOR Marine 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 SEACOR Marine Holdings, you can compare the effects of market volatilities on Caravelle International and SEACOR Marine 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 SEACOR Marine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caravelle International and SEACOR Marine.

Diversification Opportunities for Caravelle International and SEACOR Marine

-0.8

Correlation Coefficient

Caravelle International  SEACOR Marine

Pay attention - limited upside

The 3 months correlation between Caravelle and SEACOR is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Caravelle International Group and SEACOR Marine Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEACOR Marine Holdings 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 SEACOR Marine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEACOR Marine Holdings has no effect on the direction of Caravelle International i.e., Caravelle International and SEACOR Marine go up and down completely randomly.

Pair Corralation between Caravelle International and SEACOR Marine

Given the investment horizon of 90 days Caravelle International Group is expected to generate 3.04 times more return on investment than SEACOR Marine. However, Caravelle International is 3.04 times more volatile than SEACOR Marine Holdings. It trades about 0.31 of its potential returns per unit of risk. SEACOR Marine Holdings is currently generating about -0.12 per unit of risk. If you would invest  131.00  in Caravelle International Group on September 25, 2024 and sell it today you would earn a total of  122.00  from holding Caravelle International Group or generate 93.13% return on investment over 90 days.

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

Caravelle International Group  vs.  SEACOR Marine Holdings

Caravelle International

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Caravelle International Group are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain fundamental indicators, Caravelle International displayed solid returns over the last few months and may actually be approaching a breakup point.

SEACOR Marine Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SEACOR Marine Holdings 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 technical indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Caravelle International and SEACOR Marine

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

The idea behind Caravelle International Group and SEACOR Marine Holdings 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.