Correlation Between APPLIED MATERIALS and SEI INVESTMENTS
Can any of the company-specific risk be diversified away by investing in both APPLIED MATERIALS 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 APPLIED MATERIALS and SEI INVESTMENTS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between APPLIED MATERIALS and SEI INVESTMENTS, you can compare the effects of market volatilities on APPLIED MATERIALS 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 APPLIED MATERIALS with a short position of SEI INVESTMENTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of APPLIED MATERIALS and SEI INVESTMENTS.
Diversification Opportunities for APPLIED MATERIALS and SEI INVESTMENTS
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between APPLIED and SEI is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding APPLIED MATERIALS and SEI INVESTMENTS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEI INVESTMENTS and APPLIED MATERIALS 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 APPLIED MATERIALS 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 APPLIED MATERIALS i.e., APPLIED MATERIALS and SEI INVESTMENTS go up and down completely randomly.
Pair Corralation between APPLIED MATERIALS and SEI INVESTMENTS
Assuming the 90 days trading horizon APPLIED MATERIALS is expected to generate 6.35 times less return on investment than SEI INVESTMENTS. In addition to that, APPLIED MATERIALS is 2.42 times more volatile than SEI INVESTMENTS. It trades about 0.01 of its total potential returns per unit of risk. SEI INVESTMENTS is currently generating about 0.11 per unit of volatility. If you would invest 7,753 in SEI INVESTMENTS on October 30, 2024 and sell it today you would earn a total of 347.00 from holding SEI INVESTMENTS or generate 4.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
APPLIED MATERIALS vs. SEI INVESTMENTS
Performance |
| Timeline |
| APPLIED MATERIALS |
| SEI INVESTMENTS |
APPLIED MATERIALS and SEI INVESTMENTS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with APPLIED MATERIALS and SEI INVESTMENTS
The main advantage of trading using opposite APPLIED MATERIALS and SEI INVESTMENTS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if APPLIED MATERIALS 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.| APPLIED MATERIALS vs. TRI CHEMICAL LABORATINC | APPLIED MATERIALS vs. Quaker Chemical | APPLIED MATERIALS vs. SEKISUI CHEMICAL | APPLIED MATERIALS vs. KINGBOARD CHEMICAL |
| SEI INVESTMENTS vs. Apple Inc | SEI INVESTMENTS vs. Apple Inc | SEI INVESTMENTS vs. Apple Inc | SEI INVESTMENTS vs. Apple Inc |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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