Correlation Between SEAL Incorporated and Amalgamated Industrial
Can any of the company-specific risk be diversified away by investing in both SEAL Incorporated and Amalgamated Industrial 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 SEAL Incorporated and Amalgamated Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SEAL Incorporated Bhd and Amalgamated Industrial Steel, you can compare the effects of market volatilities on SEAL Incorporated and Amalgamated Industrial 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 SEAL Incorporated with a short position of Amalgamated Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of SEAL Incorporated and Amalgamated Industrial.
Diversification Opportunities for SEAL Incorporated and Amalgamated Industrial
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between SEAL and Amalgamated is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding SEAL Incorporated Bhd and Amalgamated Industrial Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amalgamated Industrial and SEAL Incorporated 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 SEAL Incorporated Bhd are associated (or correlated) with Amalgamated Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amalgamated Industrial has no effect on the direction of SEAL Incorporated i.e., SEAL Incorporated and Amalgamated Industrial go up and down completely randomly.
Pair Corralation between SEAL Incorporated and Amalgamated Industrial
Assuming the 90 days trading horizon SEAL Incorporated Bhd is expected to under-perform the Amalgamated Industrial. But the stock apears to be less risky and, when comparing its historical volatility, SEAL Incorporated Bhd is 4.49 times less risky than Amalgamated Industrial. The stock trades about -0.18 of its potential returns per unit of risk. The Amalgamated Industrial Steel is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 12.00 in Amalgamated Industrial Steel on August 31, 2024 and sell it today you would earn a total of 0.00 from holding Amalgamated Industrial Steel or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 97.73% |
| Values | Daily Returns |
SEAL Incorporated Bhd vs. Amalgamated Industrial Steel
Performance |
| Timeline |
| SEAL Incorporated Bhd |
| Amalgamated Industrial |
SEAL Incorporated and Amalgamated Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SEAL Incorporated and Amalgamated Industrial
The main advantage of trading using opposite SEAL Incorporated and Amalgamated Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SEAL Incorporated position performs unexpectedly, Amalgamated Industrial 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 Amalgamated Industrial will offset losses from the drop in Amalgamated Industrial's long position.| SEAL Incorporated vs. Amalgamated Industrial Steel | SEAL Incorporated vs. Meridian Bhd | SEAL Incorporated vs. Digistar Bhd | SEAL Incorporated vs. Minetech Resources Bhd |
| Amalgamated Industrial vs. Meridian Bhd | Amalgamated Industrial vs. Digistar Bhd | Amalgamated Industrial vs. Minetech Resources Bhd | Amalgamated Industrial vs. Swift Haulage Bhd |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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