Correlation Between Sea and 14040HCY9

Can any of the company-specific risk be diversified away by investing in both Sea and 14040HCY9 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 14040HCY9 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Sea and COF 5817 01 FEB 34, you can compare the effects of market volatilities on Sea and 14040HCY9 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 14040HCY9. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sea and 14040HCY9.

Diversification Opportunities for Sea and 14040HCY9

-0.14

Correlation Coefficient

Sea  14040HCY9

Good diversification

The 3 months correlation between Sea and 14040HCY9 is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Sea and COF 5817 01 FEB 34 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COF 5817 01 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 14040HCY9. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COF 5817 01 has no effect on the direction of Sea i.e., Sea and 14040HCY9 go up and down completely randomly.

Pair Corralation between Sea and 14040HCY9

Allowing for the 90-day total investment horizon Sea is expected to generate 3.57 times more return on investment than 14040HCY9. However, Sea is 3.57 times more volatile than COF 5817 01 FEB 34. It trades about 0.11 of its potential returns per unit of risk. COF 5817 01 FEB 34 is currently generating about 0.06 per unit of risk. If you would invest  10,052  in Sea on October 24, 2024 and sell it today you would earn a total of  1,456  from holding Sea or generate 14.48% return on investment over 90 days.

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

Sea  vs.  COF 5817 01 FEB 34

Sea

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sea are ranked lower than 8 (%) 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.

COF 5817 01

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in COF 5817 01 FEB 34 are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, 14040HCY9 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Sea and 14040HCY9

The main advantage of trading using opposite Sea and 14040HCY9 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sea position performs unexpectedly, 14040HCY9 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 14040HCY9 will offset losses from the drop in 14040HCY9's long position.

The idea behind Sea and COF 5817 01 FEB 34 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.