Correlation Between AAC TECHNOLOGHLDGADR and SEI INVESTMENTS
Can any of the company-specific risk be diversified away by investing in both AAC TECHNOLOGHLDGADR 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 AAC TECHNOLOGHLDGADR and SEI INVESTMENTS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AAC TECHNOLOGHLDGADR and SEI INVESTMENTS, you can compare the effects of market volatilities on AAC TECHNOLOGHLDGADR 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 AAC TECHNOLOGHLDGADR with a short position of SEI INVESTMENTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of AAC TECHNOLOGHLDGADR and SEI INVESTMENTS.
Diversification Opportunities for AAC TECHNOLOGHLDGADR and SEI INVESTMENTS
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AAC and SEI is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding AAC TECHNOLOGHLDGADR and SEI INVESTMENTS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEI INVESTMENTS and AAC TECHNOLOGHLDGADR 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 AAC TECHNOLOGHLDGADR 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 AAC TECHNOLOGHLDGADR i.e., AAC TECHNOLOGHLDGADR and SEI INVESTMENTS go up and down completely randomly.
Pair Corralation between AAC TECHNOLOGHLDGADR and SEI INVESTMENTS
Assuming the 90 days horizon AAC TECHNOLOGHLDGADR is expected to generate 2.58 times more return on investment than SEI INVESTMENTS. However, AAC TECHNOLOGHLDGADR is 2.58 times more volatile than SEI INVESTMENTS. It trades about 0.02 of its potential returns per unit of risk. SEI INVESTMENTS is currently generating about -0.1 per unit of risk. If you would invest 454.00 in AAC TECHNOLOGHLDGADR on October 13, 2024 and sell it today you would earn a total of 2.00 from holding AAC TECHNOLOGHLDGADR or generate 0.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AAC TECHNOLOGHLDGADR vs. SEI INVESTMENTS
Performance |
| Timeline |
| AAC TECHNOLOGHLDGADR |
| SEI INVESTMENTS |
AAC TECHNOLOGHLDGADR and SEI INVESTMENTS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AAC TECHNOLOGHLDGADR and SEI INVESTMENTS
The main advantage of trading using opposite AAC TECHNOLOGHLDGADR and SEI INVESTMENTS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AAC TECHNOLOGHLDGADR 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.| AAC TECHNOLOGHLDGADR vs. Inspire Medical Systems | AAC TECHNOLOGHLDGADR vs. ENVVENO MEDICAL DL 00001 | AAC TECHNOLOGHLDGADR vs. Peijia Medical Limited | AAC TECHNOLOGHLDGADR vs. Advanced Medical Solutions |
| SEI INVESTMENTS vs. VELA TECHNOLPLC LS 0001 | SEI INVESTMENTS vs. Magic Software Enterprises | SEI INVESTMENTS vs. PSI Software AG | SEI INVESTMENTS vs. AAC TECHNOLOGHLDGADR |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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