Correlation Between Lantronix and SeaChange International

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

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

Diversification Opportunities for Lantronix and SeaChange International

0.0

Correlation Coefficient

Lantronix  SeaChange International

Pay attention - limited upside

The 3 months correlation between Lantronix and SeaChange is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Lantronix and SeaChange International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SeaChange International and Lantronix 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 Lantronix are associated (or correlated) with SeaChange International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SeaChange International has no effect on the direction of Lantronix i.e., Lantronix and SeaChange International go up and down completely randomly.

Pair Corralation between Lantronix and SeaChange International

If you would invest  221.00  in Lantronix on May 4, 2025 and sell it today you would earn a total of  73.00  from holding Lantronix or generate 33.03% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Lantronix  vs.  SeaChange International

Lantronix

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Lantronix are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, Lantronix showed solid returns over the last few months and may actually be approaching a breakup point.

SeaChange International

Risk-Adjusted Performance

Very Weak

Over the last 90 days SeaChange International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, SeaChange International is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Lantronix and SeaChange International

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

The idea behind Lantronix and SeaChange International 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.