Correlation Between Clean Seas and Southern Hemisphere

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

By analyzing existing cross correlation between Clean Seas Seafood and Southern Hemisphere Mining, you can compare the effects of market volatilities on Clean Seas and Southern Hemisphere 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 Clean Seas with a short position of Southern Hemisphere. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clean Seas and Southern Hemisphere.

Diversification Opportunities for Clean Seas and Southern Hemisphere

-0.32

Correlation Coefficient

Clean Seas  Southern Hemisphere

Very good diversification

The 3 months correlation between Clean and Southern is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Clean Seas Seafood and Southern Hemisphere Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southern Hemisphere and Clean Seas 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 Clean Seas Seafood are associated (or correlated) with Southern Hemisphere. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southern Hemisphere has no effect on the direction of Clean Seas i.e., Clean Seas and Southern Hemisphere go up and down completely randomly.

Pair Corralation between Clean Seas and Southern Hemisphere

Assuming the 90 days trading horizon Clean Seas Seafood is expected to generate 0.21 times more return on investment than Southern Hemisphere. However, Clean Seas Seafood is 4.66 times less risky than Southern Hemisphere. It trades about 0.13 of its potential returns per unit of risk. Southern Hemisphere Mining is currently generating about -0.03 per unit of risk. If you would invest  13.00  in Clean Seas Seafood on April 24, 2025 and sell it today you would earn a total of  1.00  from holding Clean Seas Seafood or generate 7.69% return on investment over 90 days.

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

Clean Seas Seafood  vs.  Southern Hemisphere Mining

Clean Seas Seafood

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Clean Seas Seafood are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Clean Seas may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Southern Hemisphere

Risk-Adjusted Performance

Very Weak

Over the last 90 days Southern Hemisphere Mining has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Clean Seas and Southern Hemisphere

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

The idea behind Clean Seas Seafood and Southern Hemisphere Mining 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.