Correlation Between 124857AN3 and Sea

Can any of the company-specific risk be diversified away by investing in both 124857AN3 and Sea 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 124857AN3 and Sea into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CBS P NEW and Sea, you can compare the effects of market volatilities on 124857AN3 and Sea 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 124857AN3 with a short position of Sea. Check out your portfolio center. Please also check ongoing floating volatility patterns of 124857AN3 and Sea.

Diversification Opportunities for 124857AN3 and Sea

0.23

Correlation Coefficient

124857AN3  Sea

Modest diversification

The 3 months correlation between 124857AN3 and Sea is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding CBS P NEW and Sea in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sea and 124857AN3 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 CBS P NEW are associated (or correlated) with Sea. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sea has no effect on the direction of 124857AN3 i.e., 124857AN3 and Sea go up and down completely randomly.

Pair Corralation between 124857AN3 and Sea

Assuming the 90 days trading horizon CBS P NEW is expected to under-perform the Sea. In addition to that, 124857AN3 is 1.37 times more volatile than Sea. It trades about -0.13 of its total potential returns per unit of risk. Sea is currently generating about 0.09 per unit of volatility. If you would invest  11,550  in Sea on December 3, 2024 and sell it today you would earn a total of  1,177  from holding Sea or generate 10.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	93.44%
Values	Daily Returns

CBS P NEW  vs.  Sea

CBS P NEW

Risk-Adjusted Performance

Very Weak

Over the last 90 days CBS P NEW has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for CBS P NEW investors.

Sea

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sea are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Sea may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with 124857AN3 and Sea

The main advantage of trading using opposite 124857AN3 and Sea positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 124857AN3 position performs unexpectedly, Sea 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 Sea will offset losses from the drop in Sea's long position.

The idea behind CBS P NEW and Sea 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.