Correlation Between Seafco Public and Pre Built
Can any of the company-specific risk be diversified away by investing in both Seafco Public and Pre Built 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 Seafco Public and Pre Built into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Seafco Public and Pre Built Public, you can compare the effects of market volatilities on Seafco Public and Pre Built 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 Seafco Public with a short position of Pre Built. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seafco Public and Pre Built.
Diversification Opportunities for Seafco Public and Pre Built
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Seafco and Pre is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Seafco Public and Pre Built Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pre Built Public and Seafco Public 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 Seafco Public are associated (or correlated) with Pre Built. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pre Built Public has no effect on the direction of Seafco Public i.e., Seafco Public and Pre Built go up and down completely randomly.
Pair Corralation between Seafco Public and Pre Built
Assuming the 90 days trading horizon Seafco Public is expected to under-perform the Pre Built. But the stock apears to be less risky and, when comparing its historical volatility, Seafco Public is 1.38 times less risky than Pre Built. The stock trades about -0.26 of its potential returns per unit of risk. The Pre Built Public is currently generating about -0.14 of returns per unit of risk over similar time horizon. If you would invest 496.00 in Pre Built Public on September 4, 2024 and sell it today you would lose (60.00) from holding Pre Built Public or give up 12.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Seafco Public vs. Pre Built Public
Performance |
| Timeline |
| Seafco Public |
| Pre Built Public |
Seafco Public and Pre Built Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seafco Public and Pre Built
The main advantage of trading using opposite Seafco Public and Pre Built positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seafco Public position performs unexpectedly, Pre Built 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 Pre Built will offset losses from the drop in Pre Built's long position.| Seafco Public vs. Asia Aviation Public | Seafco Public vs. Bangkok Dusit Medical | Seafco Public vs. Bangkok Expressway and | Seafco Public vs. Airports of Thailand |
| Pre Built vs. Asia Aviation Public | Pre Built vs. Bangkok Dusit Medical | Pre Built vs. Bangkok Expressway and | Pre Built vs. Airports of Thailand |
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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