Correlation Between USWE SPORTS and SEI INVESTMENTS
Can any of the company-specific risk be diversified away by investing in both USWE SPORTS and SEI INVESTMENTS 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 USWE SPORTS and SEI INVESTMENTS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between USWE SPORTS AB and SEI INVESTMENTS, you can compare the effects of market volatilities on USWE SPORTS and SEI INVESTMENTS 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 USWE SPORTS with a short position of SEI INVESTMENTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of USWE SPORTS and SEI INVESTMENTS.
Diversification Opportunities for USWE SPORTS and SEI INVESTMENTS
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between USWE and SEI is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding USWE SPORTS AB and SEI INVESTMENTS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEI INVESTMENTS and USWE SPORTS 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 USWE SPORTS AB are associated (or correlated) with SEI INVESTMENTS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEI INVESTMENTS has no effect on the direction of USWE SPORTS i.e., USWE SPORTS and SEI INVESTMENTS go up and down completely randomly.
Pair Corralation between USWE SPORTS and SEI INVESTMENTS
Assuming the 90 days horizon USWE SPORTS AB is expected to generate 2.26 times more return on investment than SEI INVESTMENTS. However, USWE SPORTS is 2.26 times more volatile than SEI INVESTMENTS. It trades about 0.25 of its potential returns per unit of risk. SEI INVESTMENTS is currently generating about 0.21 per unit of risk. If you would invest 74.00 in USWE SPORTS AB on October 20, 2024 and sell it today you would earn a total of 7.00 from holding USWE SPORTS AB or generate 9.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.44% |
| Values | Daily Returns |
USWE SPORTS AB vs. SEI INVESTMENTS
Performance |
| Timeline |
| USWE SPORTS AB |
| SEI INVESTMENTS |
USWE SPORTS and SEI INVESTMENTS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with USWE SPORTS and SEI INVESTMENTS
The main advantage of trading using opposite USWE SPORTS and SEI INVESTMENTS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if USWE SPORTS position performs unexpectedly, SEI INVESTMENTS 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 SEI INVESTMENTS will offset losses from the drop in SEI INVESTMENTS's long position.| USWE SPORTS vs. Yuexiu Transport Infrastructure | USWE SPORTS vs. Osisko Metals | USWE SPORTS vs. FIREWEED METALS P | USWE SPORTS vs. IMAGIN MEDICAL INC |
| SEI INVESTMENTS vs. Siemens Healthineers AG | SEI INVESTMENTS vs. Treasury Wine Estates | SEI INVESTMENTS vs. CVS Health | SEI INVESTMENTS vs. Planet Fitness |
Check out your portfolio center.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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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