Correlation Between 23291KAH8 and Sea

Can any of the company-specific risk be diversified away by investing in both 23291KAH8 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 23291KAH8 and Sea into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between DH EUROPE FINANCE and Sea, you can compare the effects of market volatilities on 23291KAH8 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 23291KAH8 with a short position of Sea. Check out your portfolio center. Please also check ongoing floating volatility patterns of 23291KAH8 and Sea.

Diversification Opportunities for 23291KAH8 and Sea

-0.35

Correlation Coefficient

23291KAH8  Sea

Very good diversification

The 3 months correlation between 23291KAH8 and Sea is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding DH EUROPE FINANCE and Sea in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sea and 23291KAH8 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 DH EUROPE FINANCE 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 23291KAH8 i.e., 23291KAH8 and Sea go up and down completely randomly.

Pair Corralation between 23291KAH8 and Sea

Assuming the 90 days trading horizon DH EUROPE FINANCE is expected to generate 0.12 times more return on investment than Sea. However, DH EUROPE FINANCE is 8.17 times less risky than Sea. It trades about -0.37 of its potential returns per unit of risk. Sea is currently generating about -0.18 per unit of risk. If you would invest  9,165  in DH EUROPE FINANCE on October 9, 2024 and sell it today you would lose (144.00) from holding DH EUROPE FINANCE or give up 1.57% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.0%
Values	Daily Returns

DH EUROPE FINANCE  vs.  Sea

DH EUROPE FINANCE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DH EUROPE FINANCE has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 23291KAH8 is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Sea

Risk-Adjusted Performance

7 of 100

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 exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with 23291KAH8 and Sea

The main advantage of trading using opposite 23291KAH8 and Sea positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 23291KAH8 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 DH EUROPE FINANCE 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.