Correlation Between Anterix and Sea

Can any of the company-specific risk be diversified away by investing in both Anterix and Sea 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 Anterix and Sea into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Anterix and Sea, you can compare the effects of market volatilities on Anterix and Sea 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 Anterix with a short position of Sea. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anterix and Sea.

Diversification Opportunities for Anterix and Sea

-0.57

Correlation Coefficient

Anterix  Sea

Excellent diversification

The 3 months correlation between Anterix and Sea is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Anterix and Sea in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sea and Anterix 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 Anterix are associated (or correlated) with Sea. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sea has no effect on the direction of Anterix i.e., Anterix and Sea go up and down completely randomly.

Pair Corralation between Anterix and Sea

Given the investment horizon of 90 days Anterix is expected to under-perform the Sea. But the stock apears to be less risky and, when comparing its historical volatility, Anterix is 1.06 times less risky than Sea. The stock trades about -0.09 of its potential returns per unit of risk. The Sea is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest  8,240  in Sea on September 18, 2024 and sell it today you would earn a total of  3,221  from holding Sea or generate 39.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Anterix  vs.  Sea

Anterix

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Anterix has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Sea

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Sea are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Sea exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Anterix and Sea

The main advantage of trading using opposite Anterix and Sea positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anterix position performs unexpectedly, Sea 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 Sea will offset losses from the drop in Sea's long position.

The idea behind Anterix and Sea pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.