Correlation Between Sembcorp Marine and Coda Octopus
Can any of the company-specific risk be diversified away by investing in both Sembcorp Marine and Coda Octopus 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 Sembcorp Marine and Coda Octopus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sembcorp Marine and Coda Octopus Group, you can compare the effects of market volatilities on Sembcorp Marine and Coda Octopus 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 Sembcorp Marine with a short position of Coda Octopus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sembcorp Marine and Coda Octopus.
Diversification Opportunities for Sembcorp Marine and Coda Octopus
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sembcorp and Coda is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Sembcorp Marine and Coda Octopus Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coda Octopus Group and Sembcorp Marine 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 Sembcorp Marine are associated (or correlated) with Coda Octopus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coda Octopus Group has no effect on the direction of Sembcorp Marine i.e., Sembcorp Marine and Coda Octopus go up and down completely randomly.
Pair Corralation between Sembcorp Marine and Coda Octopus
Assuming the 90 days horizon Sembcorp Marine is expected to generate 2.07 times less return on investment than Coda Octopus. In addition to that, Sembcorp Marine is 2.1 times more volatile than Coda Octopus Group. It trades about 0.01 of its total potential returns per unit of risk. Coda Octopus Group is currently generating about 0.05 per unit of volatility. If you would invest 881.00 in Coda Octopus Group on August 29, 2024 and sell it today you would earn a total of 21.00 from holding Coda Octopus Group or generate 2.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sembcorp Marine vs. Coda Octopus Group
Performance |
| Timeline |
| Sembcorp Marine |
| Coda Octopus Group |
Sembcorp Marine and Coda Octopus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sembcorp Marine and Coda Octopus
The main advantage of trading using opposite Sembcorp Marine and Coda Octopus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sembcorp Marine position performs unexpectedly, Coda Octopus 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 Coda Octopus will offset losses from the drop in Coda Octopus' long position.| Sembcorp Marine vs. Austal Limited | Sembcorp Marine vs. Rolls Royce Holdings PLC | Sembcorp Marine vs. AAR Corp | Sembcorp Marine vs. Eve Holding |
| Coda Octopus vs. Ducommun Incorporated | Coda Octopus vs. Park Electrochemical | Coda Octopus vs. National Presto Industries | Coda Octopus vs. Astronics |
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.
Other Complementary Tools
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| 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 | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |