Correlation Between Sea and Etsy
Can any of the company-specific risk be diversified away by investing in both Sea and Etsy 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 Etsy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sea and Etsy Inc, you can compare the effects of market volatilities on Sea and Etsy 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 Etsy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sea and Etsy.
Diversification Opportunities for Sea and Etsy
Excellent diversification
The 3 months correlation between Sea and Etsy is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Sea and Etsy Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Etsy 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 Etsy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Etsy Inc has no effect on the direction of Sea i.e., Sea and Etsy go up and down completely randomly.
Pair Corralation between Sea and Etsy
Allowing for the 90-day total investment horizon Sea is expected to generate 1.26 times more return on investment than Etsy. However, Sea is 1.26 times more volatile than Etsy Inc. It trades about 0.05 of its potential returns per unit of risk. Etsy Inc is currently generating about -0.05 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 Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sea vs. Etsy Inc
Performance |
| Timeline |
| Sea |
| Etsy Inc |
Sea and Etsy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sea and Etsy
The main advantage of trading using opposite Sea and Etsy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sea position performs unexpectedly, Etsy 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 Etsy will offset losses from the drop in Etsy'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 CEOs Directory module to screen CEOs from public companies around the world.
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