Correlation Between Seaboard and Matthews International
Can any of the company-specific risk be diversified away by investing in both Seaboard and Matthews International 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 Seaboard and Matthews International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Seaboard and Matthews International, you can compare the effects of market volatilities on Seaboard and Matthews International 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 Seaboard with a short position of Matthews International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seaboard and Matthews International.
Diversification Opportunities for Seaboard and Matthews International
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Seaboard and Matthews is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Seaboard and Matthews International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Matthews International and Seaboard 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 Seaboard are associated (or correlated) with Matthews International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Matthews International has no effect on the direction of Seaboard i.e., Seaboard and Matthews International go up and down completely randomly.
Pair Corralation between Seaboard and Matthews International
Considering the 90-day investment horizon Seaboard is expected to under-perform the Matthews International. But the stock apears to be less risky and, when comparing its historical volatility, Seaboard is 3.32 times less risky than Matthews International. The stock trades about -0.31 of its potential returns per unit of risk. The Matthews International is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 2,355 in Matthews International on August 28, 2024 and sell it today you would earn a total of 799.00 from holding Matthews International or generate 33.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Seaboard vs. Matthews International
Performance |
| Timeline |
| Seaboard |
| Matthews International |
Seaboard and Matthews International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seaboard and Matthews International
The main advantage of trading using opposite Seaboard and Matthews International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seaboard position performs unexpectedly, Matthews International 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 Matthews International will offset losses from the drop in Matthews International's long position.| Seaboard vs. White Mountains Insurance | Seaboard vs. Cable One | Seaboard vs. NVR Inc | Seaboard vs. Alexanders |
| Matthews International vs. Steel Partners Holdings | Matthews International vs. Compass Diversified | Matthews International vs. Brookfield Business Partners | Matthews International vs. Tejon Ranch 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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