Correlation Between SEVEN GROUP and MoneyMe
Can any of the company-specific risk be diversified away by investing in both SEVEN GROUP and MoneyMe 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 SEVEN GROUP and MoneyMe into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SEVEN GROUP HOLDINGS and MoneyMe, you can compare the effects of market volatilities on SEVEN GROUP and MoneyMe 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 SEVEN GROUP with a short position of MoneyMe. Check out your portfolio center. Please also check ongoing floating volatility patterns of SEVEN GROUP and MoneyMe.
Diversification Opportunities for SEVEN GROUP and MoneyMe
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between SEVEN and MoneyMe is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding SEVEN GROUP HOLDINGS and MoneyMe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MoneyMe and SEVEN GROUP 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 SEVEN GROUP HOLDINGS are associated (or correlated) with MoneyMe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MoneyMe has no effect on the direction of SEVEN GROUP i.e., SEVEN GROUP and MoneyMe go up and down completely randomly.
Pair Corralation between SEVEN GROUP and MoneyMe
Assuming the 90 days trading horizon SEVEN GROUP HOLDINGS is expected to generate 0.22 times more return on investment than MoneyMe. However, SEVEN GROUP HOLDINGS is 4.59 times less risky than MoneyMe. It trades about 0.12 of its potential returns per unit of risk. MoneyMe is currently generating about 0.02 per unit of risk. If you would invest 2,035 in SEVEN GROUP HOLDINGS on September 23, 2024 and sell it today you would earn a total of 2,456 from holding SEVEN GROUP HOLDINGS or generate 120.69% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
SEVEN GROUP HOLDINGS vs. MoneyMe
Performance |
Timeline |
SEVEN GROUP HOLDINGS |
MoneyMe |
SEVEN GROUP and MoneyMe Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with SEVEN GROUP and MoneyMe
The main advantage of trading using opposite SEVEN GROUP and MoneyMe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SEVEN GROUP position performs unexpectedly, MoneyMe 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 MoneyMe will offset losses from the drop in MoneyMe's long position.SEVEN GROUP vs. Westpac Banking | SEVEN GROUP vs. Ecofibre | SEVEN GROUP vs. iShares Global Healthcare | SEVEN GROUP vs. Australian Dairy Farms |
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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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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