Correlation Between Seaboard and WD 40

Can any of the company-specific risk be diversified away by investing in both Seaboard and WD 40 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 Seaboard and WD 40 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Seaboard and WD 40 Company, you can compare the effects of market volatilities on Seaboard and WD 40 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 Seaboard with a short position of WD 40. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seaboard and WD 40.

Diversification Opportunities for Seaboard and WD 40

-0.81

Correlation Coefficient

Seaboard  WD 40

Pay attention - limited upside

The 3 months correlation between Seaboard and WDFC is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Seaboard and WD 40 Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WD 40 Company and Seaboard 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 Seaboard are associated (or correlated) with WD 40. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WD 40 Company has no effect on the direction of Seaboard i.e., Seaboard and WD 40 go up and down completely randomly.

Pair Corralation between Seaboard and WD 40

Considering the 90-day investment horizon Seaboard is expected to generate 1.38 times more return on investment than WD 40. However, Seaboard is 1.38 times more volatile than WD 40 Company. It trades about 0.33 of its potential returns per unit of risk. WD 40 Company is currently generating about -0.09 per unit of risk. If you would invest  249,838  in Seaboard on May 12, 2025 and sell it today you would earn a total of  102,771  from holding Seaboard or generate 41.14% return on investment over 90 days.

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

Seaboard  vs.  WD 40 Company

Seaboard

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Seaboard are ranked lower than 26 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating technical and fundamental indicators, Seaboard sustained solid returns over the last few months and may actually be approaching a breakup point.

WD 40 Company

Risk-Adjusted Performance

Weakest

Over the last 90 days WD 40 Company has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's technical and fundamental indicators 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 Seaboard and WD 40

The main advantage of trading using opposite Seaboard and WD 40 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seaboard position performs unexpectedly, WD 40 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 WD 40 will offset losses from the drop in WD 40's long position.

The idea behind Seaboard and WD 40 Company 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.