Correlation Between SEVEN GROUP and 88 Energy
Can any of the company-specific risk be diversified away by investing in both SEVEN GROUP and 88 Energy 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 SEVEN GROUP and 88 Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SEVEN GROUP HOLDINGS and 88 Energy, you can compare the effects of market volatilities on SEVEN GROUP and 88 Energy 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 SEVEN GROUP with a short position of 88 Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of SEVEN GROUP and 88 Energy.
Diversification Opportunities for SEVEN GROUP and 88 Energy
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SEVEN and 88E is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding SEVEN GROUP HOLDINGS and 88 Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 88 Energy and SEVEN GROUP 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 SEVEN GROUP HOLDINGS are associated (or correlated) with 88 Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 88 Energy has no effect on the direction of SEVEN GROUP i.e., SEVEN GROUP and 88 Energy go up and down completely randomly.
Pair Corralation between SEVEN GROUP and 88 Energy
If you would invest 1.09 in 88 Energy on November 5, 2024 and sell it today you would lose (0.89) from holding 88 Energy or give up 81.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.2% |
| Values | Daily Returns |
SEVEN GROUP HOLDINGS vs. 88 Energy
Performance |
| Timeline |
| SEVEN GROUP HOLDINGS |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
| 88 Energy |
SEVEN GROUP and 88 Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SEVEN GROUP and 88 Energy
The main advantage of trading using opposite SEVEN GROUP and 88 Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SEVEN GROUP position performs unexpectedly, 88 Energy 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 88 Energy will offset losses from the drop in 88 Energy's long position.| SEVEN GROUP vs. Apiam Animal Health | SEVEN GROUP vs. Healthco Healthcare and | SEVEN GROUP vs. Lendlease Group | SEVEN GROUP vs. EVE Health Group |
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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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