Correlation Between Sea and Global E

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

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

Diversification Opportunities for Sea and Global E

-0.5

Correlation Coefficient

Sea  Global E

Very good diversification

The 3 months correlation between Sea and Global is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Sea and Global E Online in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global E Online and Sea 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 Sea are associated (or correlated) with Global E. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global E Online has no effect on the direction of Sea i.e., Sea and Global E go up and down completely randomly.

Pair Corralation between Sea and Global E

Allowing for the 90-day total investment horizon Sea is expected to generate 0.76 times more return on investment than Global E. However, Sea is 1.31 times less risky than Global E. It trades about 0.06 of its potential returns per unit of risk. Global E Online is currently generating about -0.04 per unit of risk. If you would invest  14,247  in Sea on May 6, 2025 and sell it today you would earn a total of  1,174  from holding Sea or generate 8.24% return on investment over 90 days.

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

Sea  vs.  Global E Online

Sea

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Sea are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent technical and fundamental indicators, Sea may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Global E Online

Risk-Adjusted Performance

Very Weak

Over the last 90 days Global E Online has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's fundamental drivers remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Sea and Global E

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

The idea behind Sea and Global E Online 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.