Correlation Between NFT and Sea

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

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

Diversification Opportunities for NFT and Sea

-0.6

Correlation Coefficient

NFT  Sea

Excellent diversification

The 3 months correlation between NFT and Sea is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding NFT Limited and Sea in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sea and NFT 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 NFT Limited 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 NFT i.e., NFT and Sea go up and down completely randomly.

Pair Corralation between NFT and Sea

Allowing for the 90-day total investment horizon NFT Limited is expected to under-perform the Sea. In addition to that, NFT is 3.06 times more volatile than Sea. It trades about -0.15 of its total potential returns per unit of risk. Sea is currently generating about 0.11 per unit of volatility. If you would invest  10,965  in Sea on December 25, 2024 and sell it today you would earn a total of  1,983  from holding Sea or generate 18.08% return on investment over 90 days.

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

NFT Limited  vs.  Sea

NFT Limited

Risk-Adjusted Performance

Very Weak

Over the last 90 days NFT Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating 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.

Sea

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sea are ranked lower than 8 (%) 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.

Pair Trading with NFT and Sea

The main advantage of trading using opposite NFT and Sea positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NFT 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 NFT Limited 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.