Correlation Between Sea and 26442CAH7

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Can any of the company-specific risk be diversified away by investing in both Sea and 26442CAH7 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 26442CAH7 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sea and DUKE ENERGY CAROLINAS, you can compare the effects of market volatilities on Sea and 26442CAH7 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 26442CAH7. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sea and 26442CAH7.

Diversification Opportunities for Sea and 26442CAH7

-0.26
  Correlation Coefficient

Very good diversification

The 3 months correlation between Sea and 26442CAH7 is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Sea and DUKE ENERGY CAROLINAS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DUKE ENERGY CAROLINAS 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 26442CAH7. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DUKE ENERGY CAROLINAS has no effect on the direction of Sea i.e., Sea and 26442CAH7 go up and down completely randomly.

Pair Corralation between Sea and 26442CAH7

Allowing for the 90-day total investment horizon Sea is expected to under-perform the 26442CAH7. In addition to that, Sea is 1.5 times more volatile than DUKE ENERGY CAROLINAS. It trades about -0.18 of its total potential returns per unit of risk. DUKE ENERGY CAROLINAS is currently generating about -0.1 per unit of volatility. If you would invest  10,175  in DUKE ENERGY CAROLINAS on October 10, 2024 and sell it today you would lose (278.00) from holding DUKE ENERGY CAROLINAS or give up 2.73% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy95.24%
ValuesDaily Returns

Sea  vs.  DUKE ENERGY CAROLINAS

 Performance 
       Timeline  
Sea 

Risk-Adjusted Performance

6 of 100

 
Weak
 
Strong
OK
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 may actually be approaching a critical reversion point that can send shares even higher in February 2025.
DUKE ENERGY CAROLINAS 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days DUKE ENERGY CAROLINAS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 26442CAH7 is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Sea and 26442CAH7 Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Sea and 26442CAH7

The main advantage of trading using opposite Sea and 26442CAH7 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sea position performs unexpectedly, 26442CAH7 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 26442CAH7 will offset losses from the drop in 26442CAH7's long position.
The idea behind Sea and DUKE ENERGY CAROLINAS 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 Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.

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