Correlation Between Nasdaq and SEACOR Marine

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

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

Diversification Opportunities for Nasdaq and SEACOR Marine

-0.84

Correlation Coefficient

Nasdaq  SEACOR Marine

Pay attention - limited upside

The 3 months correlation between Nasdaq and SEACOR is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq Inc 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 Nasdaq 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 Nasdaq Inc 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 Nasdaq i.e., Nasdaq and SEACOR Marine go up and down completely randomly.

Pair Corralation between Nasdaq and SEACOR Marine

Given the investment horizon of 90 days Nasdaq Inc is expected to generate 0.26 times more return on investment than SEACOR Marine. However, Nasdaq Inc is 3.8 times less risky than SEACOR Marine. It trades about -0.13 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  8,128  in Nasdaq Inc on September 25, 2024 and sell it today you would lose (236.00) from holding Nasdaq Inc or give up 2.9% of portfolio value over 90 days.

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

Nasdaq Inc  vs.  SEACOR Marine Holdings

Nasdaq Inc

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nasdaq Inc are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, Nasdaq may actually be approaching a critical reversion point that can send shares even higher in January 2025.

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 Nasdaq and SEACOR Marine

The main advantage of trading using opposite Nasdaq and SEACOR Marine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq 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 Nasdaq Inc 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 CEOs Directory module to screen CEOs from public companies around the world.