Correlation Between Seafarer Exploration and Ijj

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

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

Diversification Opportunities for Seafarer Exploration and Ijj

0.49

Correlation Coefficient

Seafarer Exploration  Ijj

Very weak diversification

The 3 months correlation between Seafarer and Ijj is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Seafarer Exploration and Ijj Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ijj Corporation and Seafarer Exploration 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 Seafarer Exploration are associated (or correlated) with Ijj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ijj Corporation has no effect on the direction of Seafarer Exploration i.e., Seafarer Exploration and Ijj go up and down completely randomly.

Pair Corralation between Seafarer Exploration and Ijj

Given the investment horizon of 90 days Seafarer Exploration is expected to under-perform the Ijj. But the pink sheet apears to be less risky and, when comparing its historical volatility, Seafarer Exploration is 3.84 times less risky than Ijj. The pink sheet trades about -0.01 of its potential returns per unit of risk. The Ijj Corporation is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  0.04  in Ijj Corporation on October 25, 2024 and sell it today you would earn a total of  0.00  from holding Ijj Corporation or generate 0.0% return on investment over 90 days.

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

Seafarer Exploration  vs.  Ijj Corp.

Seafarer Exploration

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Seafarer Exploration has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Seafarer Exploration is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Ijj Corporation

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Ijj Corporation are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain forward-looking indicators, Ijj reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Seafarer Exploration and Ijj

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

The idea behind Seafarer Exploration and Ijj Corporation 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.