Correlation Between Splitit Payments and Seeing Machines

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

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

Diversification Opportunities for Splitit Payments and Seeing Machines

0.43

Correlation Coefficient

Splitit Payments  Seeing Machines

Very weak diversification

The 3 months correlation between Splitit and Seeing is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Splitit Payments and Seeing Machines Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seeing Machines and Splitit Payments 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 Splitit Payments are associated (or correlated) with Seeing Machines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seeing Machines has no effect on the direction of Splitit Payments i.e., Splitit Payments and Seeing Machines go up and down completely randomly.

Pair Corralation between Splitit Payments and Seeing Machines

Assuming the 90 days horizon Splitit Payments is expected to generate 15.43 times more return on investment than Seeing Machines. However, Splitit Payments is 15.43 times more volatile than Seeing Machines Limited. It trades about 0.08 of its potential returns per unit of risk. Seeing Machines Limited is currently generating about 0.05 per unit of risk. If you would invest  0.00  in Splitit Payments on September 23, 2024 and sell it today you would earn a total of  0.00  from holding Splitit Payments or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.21%
Values	Daily Returns

Splitit Payments  vs.  Seeing Machines Limited

Splitit Payments

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Splitit Payments has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Seeing Machines

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Seeing Machines Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable primary indicators, Seeing Machines is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Splitit Payments and Seeing Machines

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

The idea behind Splitit Payments and Seeing Machines Limited 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.