Correlation Between Sto SE and Seven West
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By analyzing existing cross correlation between Sto SE Co and Seven West Media, you can compare the effects of market volatilities on Sto SE and Seven West 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 Sto SE with a short position of Seven West. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sto SE and Seven West.
Diversification Opportunities for Sto SE and Seven West
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sto and Seven is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Sto SE Co and Seven West Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seven West Media and Sto SE 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 Sto SE Co are associated (or correlated) with Seven West. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seven West Media has no effect on the direction of Sto SE i.e., Sto SE and Seven West go up and down completely randomly.
Pair Corralation between Sto SE and Seven West
Assuming the 90 days trading horizon Sto SE Co is expected to under-perform the Seven West. But the stock apears to be less risky and, when comparing its historical volatility, Sto SE Co is 2.27 times less risky than Seven West. The stock trades about -0.37 of its potential returns per unit of risk. The Seven West Media is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest 9.25 in Seven West Media on September 5, 2024 and sell it today you would lose (0.65) from holding Seven West Media or give up 7.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Sto SE Co vs. Seven West Media
Performance |
| Timeline |
| Sto SE |
| Seven West Media |
Sto SE and Seven West Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sto SE and Seven West
The main advantage of trading using opposite Sto SE and Seven West positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sto SE position performs unexpectedly, Seven West 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 Seven West will offset losses from the drop in Seven West's long position.| Sto SE vs. Seven West Media | Sto SE vs. ATRESMEDIA | Sto SE vs. Liberty Broadband | Sto SE vs. TEXAS ROADHOUSE |
| Seven West vs. EMBARK EDUCATION LTD | Seven West vs. Tencent Music Entertainment | Seven West vs. Lion One Metals | Seven West vs. IDP EDUCATION LTD |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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