Correlation Between Sea and Metalink
Can any of the company-specific risk be diversified away by investing in both Sea and Metalink 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 Metalink into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sea and Metalink, you can compare the effects of market volatilities on Sea and Metalink 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 Metalink. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sea and Metalink.
Diversification Opportunities for Sea and Metalink
Very poor diversification
The 3 months correlation between Sea and Metalink is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Sea and Metalink in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metalink 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 Metalink. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metalink has no effect on the direction of Sea i.e., Sea and Metalink go up and down completely randomly.
Pair Corralation between Sea and Metalink
If you would invest 9,746 in Sea on September 12, 2024 and sell it today you would earn a total of 1,459 from holding Sea or generate 14.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sea vs. Metalink
Performance |
| Timeline |
| Sea |
| Metalink |
Sea and Metalink Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sea and Metalink
The main advantage of trading using opposite Sea and Metalink positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sea position performs unexpectedly, Metalink 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 Metalink will offset losses from the drop in Metalink's long position.The idea behind Sea and Metalink 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.| Metalink vs. Boston Properties | Metalink vs. GMS Inc | Metalink vs. Sea | Metalink vs. Sphere Entertainment Co |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |