Correlation Between Small Cap and SEALSQ Corp

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

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

Diversification Opportunities for Small Cap and SEALSQ Corp

0.32

Correlation Coefficient

Small Cap  SEALSQ Corp

Weak diversification

The 3 months correlation between Small and SEALSQ is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Small Cap Premium and SEALSQ Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEALSQ Corp and Small Cap 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 Small Cap Premium are associated (or correlated) with SEALSQ Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEALSQ Corp has no effect on the direction of Small Cap i.e., Small Cap and SEALSQ Corp go up and down completely randomly.

Pair Corralation between Small Cap and SEALSQ Corp

Considering the 90-day investment horizon Small Cap Premium is expected to under-perform the SEALSQ Corp. But the stock apears to be less risky and, when comparing its historical volatility, Small Cap Premium is 55.29 times less risky than SEALSQ Corp. The stock trades about -0.03 of its potential returns per unit of risk. The SEALSQ Corp is currently generating about 0.47 of returns per unit of risk over similar time horizon. If you would invest  47.00  in SEALSQ Corp on September 26, 2024 and sell it today you would earn a total of  443.00  from holding SEALSQ Corp or generate 942.55% return on investment over 90 days.

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

Small Cap Premium  vs.  SEALSQ Corp

Small Cap Premium

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Small Cap Premium are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Small Cap is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

SEALSQ Corp

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in SEALSQ Corp are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady technical and fundamental indicators, SEALSQ Corp unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Small Cap and SEALSQ Corp

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

The idea behind Small Cap Premium and SEALSQ Corp 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..