Correlation Between Seafarer Overseas and Small Company

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

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

Diversification Opportunities for Seafarer Overseas and Small Company

0.92

Correlation Coefficient

Seafarer Overseas  Small Company

Almost no diversification

The 3 months correlation between Seafarer and Small is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Seafarer Overseas Growth and Small Pany Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Small Pany Growth and Seafarer Overseas 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 Seafarer Overseas Growth are associated (or correlated) with Small Company. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Small Pany Growth has no effect on the direction of Seafarer Overseas i.e., Seafarer Overseas and Small Company go up and down completely randomly.

Pair Corralation between Seafarer Overseas and Small Company

Assuming the 90 days horizon Seafarer Overseas is expected to generate 1.22 times less return on investment than Small Company. But when comparing it to its historical volatility, Seafarer Overseas Growth is 2.03 times less risky than Small Company. It trades about 0.2 of its potential returns per unit of risk. Small Pany Growth is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  855.00  in Small Pany Growth on May 25, 2025 and sell it today you would earn a total of  87.00  from holding Small Pany Growth or generate 10.18% return on investment over 90 days.

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

Seafarer Overseas Growth  vs.  Small Pany Growth

Seafarer Overseas Growth

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Seafarer Overseas Growth are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Seafarer Overseas may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Small Pany Growth

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Small Pany Growth are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak essential indicators, Small Company may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Seafarer Overseas and Small Company

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

The idea behind Seafarer Overseas Growth and Small Pany Growth 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.