Correlation Between Seafarer Overseas and PIMCO RAFI

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

By analyzing existing cross correlation between Seafarer Overseas Gr and PIMCO RAFI Dynamic, you can compare the effects of market volatilities on Seafarer Overseas and PIMCO RAFI 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 PIMCO RAFI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seafarer Overseas and PIMCO RAFI.

Diversification Opportunities for Seafarer Overseas and PIMCO RAFI

0.98

Correlation Coefficient

Seafarer Overseas  PIMCO RAFI

Almost no diversification

The 3 months correlation between Seafarer and PIMCO is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Seafarer Overseas Gr and PIMCO RAFI Dynamic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PIMCO RAFI Dynamic 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 Gr are associated (or correlated) with PIMCO RAFI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PIMCO RAFI Dynamic has no effect on the direction of Seafarer Overseas i.e., Seafarer Overseas and PIMCO RAFI go up and down completely randomly.

Pair Corralation between Seafarer Overseas and PIMCO RAFI

Assuming the 90 days horizon Seafarer Overseas is expected to generate 1.78 times less return on investment than PIMCO RAFI. But when comparing it to its historical volatility, Seafarer Overseas Gr is 1.11 times less risky than PIMCO RAFI. It trades about 0.12 of its potential returns per unit of risk. PIMCO RAFI Dynamic is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  1,937  in PIMCO RAFI Dynamic on May 6, 2025 and sell it today you would earn a total of  161.00  from holding PIMCO RAFI Dynamic or generate 8.31% 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 Gr  vs.  PIMCO RAFI Dynamic

Seafarer Overseas

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Seafarer Overseas Gr are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Seafarer Overseas is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

PIMCO RAFI Dynamic

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in PIMCO RAFI Dynamic are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of very weak technical and fundamental indicators, PIMCO RAFI may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Seafarer Overseas and PIMCO RAFI

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

The idea behind Seafarer Overseas Gr and PIMCO RAFI Dynamic 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.