Correlation Between SEATech Ventures and High Wire

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

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

Diversification Opportunities for SEATech Ventures and High Wire

0.2

Correlation Coefficient

SEATech Ventures  High Wire

Modest diversification

The 3 months correlation between SEATech and High is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding SEATech Ventures Corp and High Wire Networks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on High Wire Networks and SEATech Ventures 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 SEATech Ventures Corp are associated (or correlated) with High Wire. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of High Wire Networks has no effect on the direction of SEATech Ventures i.e., SEATech Ventures and High Wire go up and down completely randomly.

Pair Corralation between SEATech Ventures and High Wire

Given the investment horizon of 90 days SEATech Ventures Corp is expected to generate 4.59 times more return on investment than High Wire. However, SEATech Ventures is 4.59 times more volatile than High Wire Networks. It trades about 0.16 of its potential returns per unit of risk. High Wire Networks is currently generating about 0.09 per unit of risk. If you would invest  4.20  in SEATech Ventures Corp on September 1, 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 Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

SEATech Ventures Corp  vs.  High Wire Networks

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 inconsistent basic indicators, SEATech Ventures showed solid returns over the last few months and may actually be approaching a breakup point.

High Wire Networks

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in High Wire Networks are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly abnormal basic indicators, High Wire demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SEATech Ventures and High Wire

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

The idea behind SEATech Ventures Corp and High Wire Networks 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.