Correlation Between 808 Renewable and Sembcorp Marine

Can any of the company-specific risk be diversified away by investing in both 808 Renewable and Sembcorp 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 808 Renewable and Sembcorp Marine into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 808 Renewable Energy and Sembcorp Marine, you can compare the effects of market volatilities on 808 Renewable and Sembcorp 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 808 Renewable with a short position of Sembcorp Marine. Check out your portfolio center. Please also check ongoing floating volatility patterns of 808 Renewable and Sembcorp Marine.

Diversification Opportunities for 808 Renewable and Sembcorp Marine

0.0

Correlation Coefficient

808 Renewable  Sembcorp Marine

Pay attention - limited upside

The 3 months correlation between 808 and Sembcorp is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding 808 Renewable Energy and Sembcorp Marine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sembcorp Marine and 808 Renewable 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 808 Renewable Energy are associated (or correlated) with Sembcorp Marine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sembcorp Marine has no effect on the direction of 808 Renewable i.e., 808 Renewable and Sembcorp Marine go up and down completely randomly.

Pair Corralation between 808 Renewable and Sembcorp Marine

If you would invest  134.00  in Sembcorp Marine on December 28, 2024 and sell it today you would earn a total of  20.00  from holding Sembcorp Marine or generate 14.93% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

808 Renewable Energy  vs.  Sembcorp Marine

808 Renewable Energy

Risk-Adjusted Performance

Very Weak

Over the last 90 days 808 Renewable Energy has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, 808 Renewable is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Sembcorp Marine

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Sembcorp Marine are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile primary indicators, Sembcorp Marine reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with 808 Renewable and Sembcorp Marine

The main advantage of trading using opposite 808 Renewable and Sembcorp Marine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 808 Renewable position performs unexpectedly, Sembcorp 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 Sembcorp Marine will offset losses from the drop in Sembcorp Marine's long position.

The idea behind 808 Renewable Energy and Sembcorp Marine 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.