Correlation Between Sea and Integral

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

By analyzing existing cross correlation between Sea and Integral Ad Science, you can compare the effects of market volatilities on Sea and Integral 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 Integral. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sea and Integral.

Diversification Opportunities for Sea and Integral

-0.28

Correlation Coefficient

Sea  Integral

Very good diversification

The 3 months correlation between Sea and Integral is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Sea and Integral Ad Science in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Integral Ad Science 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 Integral. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Integral Ad Science has no effect on the direction of Sea i.e., Sea and Integral go up and down completely randomly.

Pair Corralation between Sea and Integral

Allowing for the 90-day total investment horizon Sea is expected to generate 0.84 times more return on investment than Integral. However, Sea is 1.2 times less risky than Integral. It trades about 0.09 of its potential returns per unit of risk. Integral Ad Science is currently generating about 0.05 per unit of risk. If you would invest  9,515  in Sea on October 5, 2024 and sell it today you would earn a total of  1,117  from holding Sea or generate 11.74% return on investment over 90 days.

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

Sea  vs.  Integral Ad Science

Sea

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Sea are ranked lower than 6 (%) 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.

Integral Ad Science

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Integral Ad Science are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Integral may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Sea and Integral

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

The idea behind Sea and Integral Ad Science 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.