Correlation Between Clean Seas and Wisetech Global

Can any of the company-specific risk be diversified away by investing in both Clean Seas and Wisetech Global 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 Wisetech Global 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 Wisetech Global, you can compare the effects of market volatilities on Clean Seas and Wisetech Global 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 Wisetech Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clean Seas and Wisetech Global.

Diversification Opportunities for Clean Seas and Wisetech Global

0.5

Correlation Coefficient

Clean Seas  Wisetech Global

Very weak diversification

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

Pair Corralation between Clean Seas and Wisetech Global

Assuming the 90 days trading horizon Clean Seas is expected to generate 23.53 times less return on investment than Wisetech Global. In addition to that, Clean Seas is 1.01 times more volatile than Wisetech Global. It trades about 0.01 of its total potential returns per unit of risk. Wisetech Global is currently generating about 0.27 per unit of volatility. If you would invest  7,650  in Wisetech Global on April 5, 2025 and sell it today you would earn a total of  3,438  from holding Wisetech Global or generate 44.94% return on investment over 90 days.

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

Clean Seas Seafood  vs.  Wisetech Global

Clean Seas Seafood

Risk-Adjusted Performance

Very Weak

Over the last 90 days Clean Seas Seafood has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Clean Seas is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Wisetech Global

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Wisetech Global are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain fundamental indicators, Wisetech Global unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Clean Seas and Wisetech Global

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

The idea behind Clean Seas Seafood and Wisetech Global 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.