Correlation Between SEACOR Marine and United Maritime

Can any of the company-specific risk be diversified away by investing in both SEACOR Marine and United Maritime 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 United Maritime 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 United Maritime, you can compare the effects of market volatilities on SEACOR Marine and United Maritime 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 United Maritime. Check out your portfolio center. Please also check ongoing floating volatility patterns of SEACOR Marine and United Maritime.

Diversification Opportunities for SEACOR Marine and United Maritime

0.35

Correlation Coefficient

SEACOR Marine  United Maritime

Weak diversification

The 3 months correlation between SEACOR and United is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding SEACOR Marine Holdings and United Maritime in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Maritime 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 United Maritime. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Maritime has no effect on the direction of SEACOR Marine i.e., SEACOR Marine and United Maritime go up and down completely randomly.

Pair Corralation between SEACOR Marine and United Maritime

Given the investment horizon of 90 days SEACOR Marine Holdings is expected to under-perform the United Maritime. In addition to that, SEACOR Marine is 1.53 times more volatile than United Maritime. It trades about -0.07 of its total potential returns per unit of risk. United Maritime is currently generating about -0.02 per unit of volatility. If you would invest  189.00  in United Maritime on December 3, 2024 and sell it today you would lose (7.00) from holding United Maritime or give up 3.7% of portfolio value over 90 days.

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

SEACOR Marine Holdings  vs.  United Maritime

SEACOR Marine Holdings

Risk-Adjusted Performance

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 April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

United Maritime

Risk-Adjusted Performance

Very Weak

Over the last 90 days United Maritime has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical and fundamental indicators, United Maritime is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with SEACOR Marine and United Maritime

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

The idea behind SEACOR Marine Holdings and United Maritime 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.