Correlation Between Seraphim Space and Associated British
Can any of the company-specific risk be diversified away by investing in both Seraphim Space and Associated British 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 Seraphim Space and Associated British into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Seraphim Space Investment and Associated British Foods, you can compare the effects of market volatilities on Seraphim Space and Associated British 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 Seraphim Space with a short position of Associated British. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seraphim Space and Associated British.
Diversification Opportunities for Seraphim Space and Associated British
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Seraphim and Associated is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Seraphim Space Investment and Associated British Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Associated British Foods and Seraphim Space 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 Seraphim Space Investment are associated (or correlated) with Associated British. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Associated British Foods has no effect on the direction of Seraphim Space i.e., Seraphim Space and Associated British go up and down completely randomly.
Pair Corralation between Seraphim Space and Associated British
Assuming the 90 days trading horizon Seraphim Space Investment is expected to under-perform the Associated British. In addition to that, Seraphim Space is 1.34 times more volatile than Associated British Foods. It trades about -0.23 of its total potential returns per unit of risk. Associated British Foods is currently generating about 0.38 per unit of volatility. If you would invest 190,150 in Associated British Foods on January 24, 2025 and sell it today you would earn a total of 27,850 from holding Associated British Foods or generate 14.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Seraphim Space Investment vs. Associated British Foods
Performance |
| Timeline |
| Seraphim Space Investment |
| Associated British Foods |
Seraphim Space and Associated British Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seraphim Space and Associated British
The main advantage of trading using opposite Seraphim Space and Associated British positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seraphim Space position performs unexpectedly, Associated British 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 Associated British will offset losses from the drop in Associated British's long position.| Seraphim Space vs. Centaur Media | Seraphim Space vs. Vienna Insurance Group | Seraphim Space vs. AcadeMedia AB | Seraphim Space vs. Liberty Media Corp |
| Associated British vs. Air Products Chemicals | Associated British vs. Blackrock World Mining | Associated British vs. Fortuna Silver Mines | Associated British vs. Westlake Chemical Corp |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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