Correlation Between Sea and Alpha Healthcare

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

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

Diversification Opportunities for Sea and Alpha Healthcare

-0.19

Correlation Coefficient

Sea  Alpha Healthcare

Good diversification

The 3 months correlation between Sea and Alpha is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Sea and Alpha Healthcare Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alpha Healthcare Acq and Sea 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 Sea are associated (or correlated) with Alpha Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alpha Healthcare Acq has no effect on the direction of Sea i.e., Sea and Alpha Healthcare go up and down completely randomly.

Pair Corralation between Sea and Alpha Healthcare

If you would invest  9,915  in Sea on October 25, 2024 and sell it today you would earn a total of  1,921  from holding Sea or generate 19.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.67%
Values	Daily Returns

Sea  vs.  Alpha Healthcare Acquisition

Sea

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sea are ranked lower than 10 (%) 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.

Alpha Healthcare Acq

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alpha Healthcare Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Alpha Healthcare is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Sea and Alpha Healthcare

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

The idea behind Sea and Alpha Healthcare Acquisition 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 Global Correlations module to find global opportunities by holding instruments from different markets.