Correlation Between Sezzle Common and SEB SA

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

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

Diversification Opportunities for Sezzle Common and SEB SA

-0.44

Correlation Coefficient

Sezzle Common  SEB SA

Very good diversification

The 3 months correlation between Sezzle and SEB is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Sezzle Common Stock and SEB SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEB SA and Sezzle Common 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 Sezzle Common Stock are associated (or correlated) with SEB SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEB SA has no effect on the direction of Sezzle Common i.e., Sezzle Common and SEB SA go up and down completely randomly.

Pair Corralation between Sezzle Common and SEB SA

Given the investment horizon of 90 days Sezzle Common Stock is expected to generate 6.75 times more return on investment than SEB SA. However, Sezzle Common is 6.75 times more volatile than SEB SA. It trades about 0.28 of its potential returns per unit of risk. SEB SA is currently generating about -0.27 per unit of risk. If you would invest  19,982  in Sezzle Common Stock on September 4, 2024 and sell it today you would earn a total of  22,421  from holding Sezzle Common Stock or generate 112.21% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.24%
Values	Daily Returns

Sezzle Common Stock  vs.  SEB SA

Sezzle Common Stock

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Sezzle Common Stock are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite quite fragile basic indicators, Sezzle Common disclosed solid returns over the last few months and may actually be approaching a breakup point.

SEB SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SEB SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Sezzle Common and SEB SA

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

The idea behind Sezzle Common Stock and SEB SA 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.