Correlation Between Associated British and SEI INVESTMENTS
Can any of the company-specific risk be diversified away by investing in both Associated British 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 British 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 British Foods and SEI INVESTMENTS, you can compare the effects of market volatilities on Associated British 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 British with a short position of SEI INVESTMENTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Associated British and SEI INVESTMENTS.
Diversification Opportunities for Associated British and SEI INVESTMENTS
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Associated and SEI is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Associated British Foods and SEI INVESTMENTS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEI INVESTMENTS and Associated British 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 British Foods 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 British i.e., Associated British and SEI INVESTMENTS go up and down completely randomly.
Pair Corralation between Associated British and SEI INVESTMENTS
Assuming the 90 days trading horizon Associated British Foods is expected to under-perform the SEI INVESTMENTS. In addition to that, Associated British is 1.43 times more volatile than SEI INVESTMENTS. It trades about -0.26 of its total potential returns per unit of risk. SEI INVESTMENTS is currently generating about 0.12 per unit of volatility. If you would invest 7,902 in SEI INVESTMENTS on October 24, 2024 and sell it today you would earn a total of 148.00 from holding SEI INVESTMENTS or generate 1.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Associated British Foods vs. SEI INVESTMENTS
Performance |
| Timeline |
| Associated British Foods |
| SEI INVESTMENTS |
Associated British and SEI INVESTMENTS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Associated British and SEI INVESTMENTS
The main advantage of trading using opposite Associated British and SEI INVESTMENTS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Associated British 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.| Associated British vs. ALBIS LEASING AG | Associated British vs. FIRST SHIP LEASE | Associated British vs. STORE ELECTRONIC | Associated British vs. Air Lease |
| SEI INVESTMENTS vs. Cardinal Health | SEI INVESTMENTS vs. BioNTech SE | SEI INVESTMENTS vs. Siemens Healthineers AG | SEI INVESTMENTS vs. CARDINAL HEALTH |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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