Correlation Between Associated Capital and SEI Investments
Can any of the company-specific risk be diversified away by investing in both Associated Capital 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 Associated Capital and SEI Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Associated Capital Group and SEI Investments, you can compare the effects of market volatilities on Associated Capital 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 Associated Capital with a short position of SEI Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Associated Capital and SEI Investments.
Diversification Opportunities for Associated Capital and SEI Investments
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Associated and SEI is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Associated Capital Group and SEI Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEI Investments and Associated Capital 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 Associated Capital Group 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 Associated Capital i.e., Associated Capital and SEI Investments go up and down completely randomly.
Pair Corralation between Associated Capital and SEI Investments
Allowing for the 90-day total investment horizon Associated Capital is expected to generate 15.85 times less return on investment than SEI Investments. But when comparing it to its historical volatility, Associated Capital Group is 1.42 times less risky than SEI Investments. It trades about 0.03 of its potential returns per unit of risk. SEI Investments is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 7,112 in SEI Investments on August 23, 2024 and sell it today you would earn a total of 904.00 from holding SEI Investments or generate 12.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Associated Capital Group vs. SEI Investments
Performance |
| Timeline |
| Associated Capital |
| SEI Investments |
Associated Capital and SEI Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Associated Capital and SEI Investments
The main advantage of trading using opposite Associated Capital and SEI Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Associated Capital 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' long position.| Associated Capital vs. DWS Municipal Income | Associated Capital vs. Blackrock Munivest | Associated Capital vs. SEI Investments | Associated Capital vs. SCOR PK |
| SEI Investments vs. Commerce Bancshares | SEI Investments vs. RLI Corp | SEI Investments vs. Westamerica Bancorporation | SEI Investments vs. Brown Brown |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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