Correlation Between Sea and Chewy
Can any of the company-specific risk be diversified away by investing in both Sea and Chewy 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 Chewy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sea and Chewy Inc, you can compare the effects of market volatilities on Sea and Chewy 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 Chewy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sea and Chewy.
Diversification Opportunities for Sea and Chewy
Very weak diversification
The 3 months correlation between Sea and Chewy is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Sea and Chewy Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chewy Inc 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 Chewy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chewy Inc has no effect on the direction of Sea i.e., Sea and Chewy go up and down completely randomly.
Pair Corralation between Sea and Chewy
Allowing for the 90-day total investment horizon Sea is expected to generate 0.97 times more return on investment than Chewy. However, Sea is 1.04 times less risky than Chewy. It trades about 0.05 of its potential returns per unit of risk. Chewy Inc is currently generating about 0.01 per unit of risk. If you would invest 5,976 in Sea on August 27, 2024 and sell it today you would earn a total of 5,328 from holding Sea or generate 89.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sea vs. Chewy Inc
Performance |
| Timeline |
| Sea |
| Chewy Inc |
Sea and Chewy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sea and Chewy
The main advantage of trading using opposite Sea and Chewy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sea position performs unexpectedly, Chewy 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 Chewy will offset losses from the drop in Chewy's long position.| Sea vs. Atari SA | Sea vs. Victory Square Technologies | Sea vs. Motorsport Gaming Us | Sea vs. Alpha Esports Tech |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| CEOs Directory Screen CEOs from public companies around the world | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories |