Correlation Between MQGAU and Sea

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

By analyzing existing cross correlation between MQGAU 2691 23 JUN 32 and Sea, you can compare the effects of market volatilities on MQGAU 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 MQGAU with a short position of Sea. Check out your portfolio center. Please also check ongoing floating volatility patterns of MQGAU and Sea.

Diversification Opportunities for MQGAU and Sea

0.15

Correlation Coefficient

MQGAU  Sea

Average diversification

The 3 months correlation between MQGAU and Sea is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding MQGAU 2691 23 JUN 32 and Sea in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sea and MQGAU 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 MQGAU 2691 23 JUN 32 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 MQGAU i.e., MQGAU and Sea go up and down completely randomly.

Pair Corralation between MQGAU and Sea

Assuming the 90 days trading horizon MQGAU 2691 23 JUN 32 is expected to under-perform the Sea. But the bond apears to be less risky and, when comparing its historical volatility, MQGAU 2691 23 JUN 32 is 3.61 times less risky than Sea. The bond trades about -0.07 of its potential returns per unit of risk. The Sea is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  7,383  in Sea on October 10, 2024 and sell it today you would earn a total of  3,259  from holding Sea or generate 44.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	47.58%
Values	Daily Returns

MQGAU 2691 23 JUN 32  vs.  Sea

MQGAU 2691 23

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MQGAU 2691 23 JUN 32 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for MQGAU 2691 23 JUN 32 investors.

Sea

Risk-Adjusted Performance

6 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sea are ranked lower than 6 (%) 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 February 2025.

Pair Trading with MQGAU and Sea

The main advantage of trading using opposite MQGAU and Sea positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MQGAU 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 MQGAU 2691 23 JUN 32 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.

Check out your portfolio center.

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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.