Correlation Between Sea and Cardlytics
Can any of the company-specific risk be diversified away by investing in both Sea and Cardlytics 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 Sea and Cardlytics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sea and Cardlytics, you can compare the effects of market volatilities on Sea and Cardlytics 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 Sea with a short position of Cardlytics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sea and Cardlytics.
Diversification Opportunities for Sea and Cardlytics
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sea and Cardlytics is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Sea and Cardlytics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cardlytics and Sea 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 Sea are associated (or correlated) with Cardlytics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cardlytics has no effect on the direction of Sea i.e., Sea and Cardlytics go up and down completely randomly.
Pair Corralation between Sea and Cardlytics
Allowing for the 90-day total investment horizon Sea is expected to generate 0.45 times more return on investment than Cardlytics. However, Sea is 2.21 times less risky than Cardlytics. It trades about 0.17 of its potential returns per unit of risk. Cardlytics is currently generating about -0.26 per unit of risk. If you would invest 10,939 in Sea on October 22, 2024 and sell it today you would earn a total of 569.00 from holding Sea or generate 5.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sea vs. Cardlytics
Performance |
| Timeline |
| Sea |
| Cardlytics |
Sea and Cardlytics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sea and Cardlytics
The main advantage of trading using opposite Sea and Cardlytics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sea position performs unexpectedly, Cardlytics 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 Cardlytics will offset losses from the drop in Cardlytics' long position.The idea behind Sea and Cardlytics 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.| Cardlytics vs. Criteo Sa | Cardlytics vs. Deluxe | Cardlytics vs. Emerald Expositions Events | Cardlytics vs. Marchex |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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