Correlation Between SERI INDUSTRIAL and Corporate Travel
Can any of the company-specific risk be diversified away by investing in both SERI INDUSTRIAL and Corporate Travel 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 SERI INDUSTRIAL and Corporate Travel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SERI INDUSTRIAL EO and Corporate Travel Management, you can compare the effects of market volatilities on SERI INDUSTRIAL and Corporate Travel 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 SERI INDUSTRIAL with a short position of Corporate Travel. Check out your portfolio center. Please also check ongoing floating volatility patterns of SERI INDUSTRIAL and Corporate Travel.
Diversification Opportunities for SERI INDUSTRIAL and Corporate Travel
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SERI and Corporate is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding SERI INDUSTRIAL EO and Corporate Travel Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corporate Travel Man and SERI INDUSTRIAL 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 SERI INDUSTRIAL EO are associated (or correlated) with Corporate Travel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corporate Travel Man has no effect on the direction of SERI INDUSTRIAL i.e., SERI INDUSTRIAL and Corporate Travel go up and down completely randomly.
Pair Corralation between SERI INDUSTRIAL and Corporate Travel
Assuming the 90 days trading horizon SERI INDUSTRIAL EO is expected to under-perform the Corporate Travel. In addition to that, SERI INDUSTRIAL is 1.27 times more volatile than Corporate Travel Management. It trades about -0.06 of its total potential returns per unit of risk. Corporate Travel Management is currently generating about 0.04 per unit of volatility. If you would invest 761.00 in Corporate Travel Management on September 2, 2024 and sell it today you would earn a total of 94.00 from holding Corporate Travel Management or generate 12.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SERI INDUSTRIAL EO vs. Corporate Travel Management
Performance |
| Timeline |
| SERI INDUSTRIAL EO |
| Corporate Travel Man |
SERI INDUSTRIAL and Corporate Travel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SERI INDUSTRIAL and Corporate Travel
The main advantage of trading using opposite SERI INDUSTRIAL and Corporate Travel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SERI INDUSTRIAL position performs unexpectedly, Corporate Travel 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 Corporate Travel will offset losses from the drop in Corporate Travel's long position.| SERI INDUSTRIAL vs. Apple Inc | SERI INDUSTRIAL vs. Apple Inc | SERI INDUSTRIAL vs. Apple Inc | SERI INDUSTRIAL vs. Apple Inc |
| Corporate Travel vs. Apple Inc | Corporate Travel vs. Apple Inc | Corporate Travel vs. Apple Inc | Corporate Travel vs. Apple Inc |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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