Correlation Between Sea and VIACOM
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By analyzing existing cross correlation between Sea and VIACOM INC NEW, you can compare the effects of market volatilities on Sea and VIACOM 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 VIACOM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sea and VIACOM.
Diversification Opportunities for Sea and VIACOM
Good diversification
The 3 months correlation between Sea and VIACOM is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Sea and VIACOM INC NEW in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VIACOM INC NEW 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 VIACOM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VIACOM INC NEW has no effect on the direction of Sea i.e., Sea and VIACOM go up and down completely randomly.
Pair Corralation between Sea and VIACOM
Allowing for the 90-day total investment horizon Sea is expected to generate 0.98 times more return on investment than VIACOM. However, Sea is 1.02 times less risky than VIACOM. It trades about 0.27 of its potential returns per unit of risk. VIACOM INC NEW is currently generating about -0.09 per unit of risk. If you would invest 7,740 in Sea on September 3, 2024 and sell it today you would earn a total of 3,640 from holding Sea or generate 47.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 92.19% |
| Values | Daily Returns |
Sea vs. VIACOM INC NEW
Performance |
| Timeline |
| Sea |
| VIACOM INC NEW |
Sea and VIACOM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sea and VIACOM
The main advantage of trading using opposite Sea and VIACOM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sea position performs unexpectedly, VIACOM 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 VIACOM will offset losses from the drop in VIACOM's long position.The idea behind Sea and VIACOM INC NEW 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.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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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