Correlation Between Seraphim Space and Guaranty Trust

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

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

Diversification Opportunities for Seraphim Space and Guaranty Trust

0.43

Correlation Coefficient

Seraphim Space  Guaranty Trust

Very weak diversification

The 3 months correlation between Seraphim and Guaranty is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Seraphim Space Investment and Guaranty Trust Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guaranty Trust Holding and Seraphim Space 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 Seraphim Space Investment are associated (or correlated) with Guaranty Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guaranty Trust Holding has no effect on the direction of Seraphim Space i.e., Seraphim Space and Guaranty Trust go up and down completely randomly.

Pair Corralation between Seraphim Space and Guaranty Trust

Assuming the 90 days trading horizon Seraphim Space Investment is expected to under-perform the Guaranty Trust. In addition to that, Seraphim Space is 1.27 times more volatile than Guaranty Trust Holding. It trades about -0.06 of its total potential returns per unit of risk. Guaranty Trust Holding is currently generating about -0.01 per unit of volatility. If you would invest  200.00  in Guaranty Trust Holding on October 9, 2024 and sell it today you would lose (10.00) from holding Guaranty Trust Holding or give up 5.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.4%
Values	Daily Returns

Seraphim Space Investment  vs.  Guaranty Trust Holding

Seraphim Space Investment

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Seraphim Space Investment are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Seraphim Space is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Guaranty Trust Holding

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Guaranty Trust Holding are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite uncertain essential indicators, Guaranty Trust disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Seraphim Space and Guaranty Trust

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

The idea behind Seraphim Space Investment and Guaranty Trust Holding 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.