Correlation Between Estrella Immunopharma and SEATech Ventures

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

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

Diversification Opportunities for Estrella Immunopharma and SEATech Ventures

-0.37

Correlation Coefficient

Estrella Immunopharma  SEATech Ventures

Very good diversification

The 3 months correlation between Estrella and SEATech is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Estrella Immunopharma and SEATech Ventures Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEATech Ventures Corp and Estrella Immunopharma 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 Estrella Immunopharma are associated (or correlated) with SEATech Ventures. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEATech Ventures Corp has no effect on the direction of Estrella Immunopharma i.e., Estrella Immunopharma and SEATech Ventures go up and down completely randomly.

Pair Corralation between Estrella Immunopharma and SEATech Ventures

Assuming the 90 days horizon Estrella Immunopharma is expected to generate 2.15 times less return on investment than SEATech Ventures. But when comparing it to its historical volatility, Estrella Immunopharma is 1.84 times less risky than SEATech Ventures. It trades about 0.14 of its potential returns per unit of risk. SEATech Ventures Corp is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  4.20  in SEATech Ventures Corp on September 3, 2024 and sell it today you would lose (1.00) from holding SEATech Ventures Corp or give up 23.81% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	32.81%
Values	Daily Returns

Estrella Immunopharma  vs.  SEATech Ventures Corp

Estrella Immunopharma

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days Estrella Immunopharma has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly fragile basic indicators, Estrella Immunopharma showed solid returns over the last few months and may actually be approaching a breakup point.

SEATech Ventures Corp

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SEATech Ventures Corp are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, SEATech Ventures showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Estrella Immunopharma and SEATech Ventures

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

The idea behind Estrella Immunopharma and SEATech Ventures Corp 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.