Correlation Between MOBILE FACTORY and Sea
Can any of the company-specific risk be diversified away by investing in both MOBILE FACTORY 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 MOBILE FACTORY and Sea into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MOBILE FACTORY INC and Sea Limited, you can compare the effects of market volatilities on MOBILE FACTORY 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 MOBILE FACTORY with a short position of Sea. Check out your portfolio center. Please also check ongoing floating volatility patterns of MOBILE FACTORY and Sea.
Diversification Opportunities for MOBILE FACTORY and Sea
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between MOBILE and Sea is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding MOBILE FACTORY INC and Sea Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sea Limited and MOBILE FACTORY 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 MOBILE FACTORY INC 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 Limited has no effect on the direction of MOBILE FACTORY i.e., MOBILE FACTORY and Sea go up and down completely randomly.
Pair Corralation between MOBILE FACTORY and Sea
Assuming the 90 days horizon MOBILE FACTORY INC is expected to generate 0.82 times more return on investment than Sea. However, MOBILE FACTORY INC is 1.22 times less risky than Sea. It trades about -0.07 of its potential returns per unit of risk. Sea Limited is currently generating about -0.09 per unit of risk. If you would invest 575.00 in MOBILE FACTORY INC on October 11, 2024 and sell it today you would lose (10.00) from holding MOBILE FACTORY INC or give up 1.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MOBILE FACTORY INC vs. Sea Limited
Performance |
| Timeline |
| MOBILE FACTORY INC |
| Sea Limited |
MOBILE FACTORY and Sea Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MOBILE FACTORY and Sea
The main advantage of trading using opposite MOBILE FACTORY and Sea positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MOBILE FACTORY 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.| MOBILE FACTORY vs. Constellation Software | MOBILE FACTORY vs. Easy Software AG | MOBILE FACTORY vs. CPU SOFTWAREHOUSE | MOBILE FACTORY vs. Kingdee International Software |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |