Correlation Between Sezzle Common and MISUMI

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

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

Diversification Opportunities for Sezzle Common and MISUMI

-0.71

Correlation Coefficient

Sezzle Common  MISUMI

Pay attention - limited upside

The 3 months correlation between Sezzle and MISUMI is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Sezzle Common Stock and MISUMI Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MISUMI Group and Sezzle Common 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 Sezzle Common Stock are associated (or correlated) with MISUMI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MISUMI Group has no effect on the direction of Sezzle Common i.e., Sezzle Common and MISUMI go up and down completely randomly.

Pair Corralation between Sezzle Common and MISUMI

Given the investment horizon of 90 days Sezzle Common Stock is expected to generate 4.11 times more return on investment than MISUMI. However, Sezzle Common is 4.11 times more volatile than MISUMI Group. It trades about 0.14 of its potential returns per unit of risk. MISUMI Group is currently generating about -0.04 per unit of risk. If you would invest  15,223  in Sezzle Common Stock on September 16, 2024 and sell it today you would earn a total of  15,678  from holding Sezzle Common Stock or generate 102.99% return on investment over 90 days.

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

Sezzle Common Stock  vs.  MISUMI Group

Sezzle Common Stock

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sezzle Common Stock are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating basic indicators, Sezzle Common disclosed solid returns over the last few months and may actually be approaching a breakup point.

MISUMI Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MISUMI Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong primary indicators, MISUMI is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Sezzle Common and MISUMI

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

The idea behind Sezzle Common Stock and MISUMI Group 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.

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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..