Correlation Between Sei and Orca

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

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

Diversification Opportunities for Sei and Orca

0.89

Correlation Coefficient

Sei  Orca

Very poor diversification

The 3 months correlation between Sei and Orca is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Sei and Orca in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orca and Sei 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 Sei are associated (or correlated) with Orca. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orca has no effect on the direction of Sei i.e., Sei and Orca go up and down completely randomly.

Pair Corralation between Sei and Orca

Assuming the 90 days trading horizon Sei is expected to under-perform the Orca. But the crypto coin apears to be less risky and, when comparing its historical volatility, Sei is 2.52 times less risky than Orca. The crypto coin trades about -0.15 of its potential returns per unit of risk. The Orca is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  391.00  in Orca on December 28, 2024 and sell it today you would lose (126.00) from holding Orca or give up 32.23% of portfolio value over 90 days.

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

Sei  vs.  Orca

Sei

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sei has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Crypto's forward indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for Sei shareholders.

Orca

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Orca are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Orca exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sei and Orca

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

The idea behind Sei and Orca 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.

Check out your portfolio center.

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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.