Correlation Between SEACOR Marine and Thermon Group

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

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

Diversification Opportunities for SEACOR Marine and Thermon Group

-0.37

Correlation Coefficient

SEACOR Marine  Thermon Group

Very good diversification

The 3 months correlation between SEACOR and Thermon is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding SEACOR Marine Holdings and Thermon Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thermon Group Holdings and SEACOR Marine 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 SEACOR Marine Holdings are associated (or correlated) with Thermon Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thermon Group Holdings has no effect on the direction of SEACOR Marine i.e., SEACOR Marine and Thermon Group go up and down completely randomly.

Pair Corralation between SEACOR Marine and Thermon Group

Given the investment horizon of 90 days SEACOR Marine Holdings is expected to generate 2.05 times more return on investment than Thermon Group. However, SEACOR Marine is 2.05 times more volatile than Thermon Group Holdings. It trades about 0.11 of its potential returns per unit of risk. Thermon Group Holdings is currently generating about -0.47 per unit of risk. If you would invest  636.00  in SEACOR Marine Holdings on October 14, 2024 and sell it today you would earn a total of  37.00  from holding SEACOR Marine Holdings or generate 5.82% return on investment over 90 days.

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

SEACOR Marine Holdings  vs.  Thermon Group Holdings

SEACOR Marine Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SEACOR Marine Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical indicators remain fairly strong which may send shares a bit higher in February 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Thermon Group Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Thermon Group Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable technical indicators, Thermon Group is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with SEACOR Marine and Thermon Group

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

The idea behind SEACOR Marine Holdings and Thermon Group Holdings 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.