Correlation Between Aurora Innovation and SEI Investments
Can any of the company-specific risk be diversified away by investing in both Aurora Innovation 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 Aurora Innovation and SEI Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aurora Innovation and SEI Investments, you can compare the effects of market volatilities on Aurora Innovation 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 Aurora Innovation with a short position of SEI Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aurora Innovation and SEI Investments.
Diversification Opportunities for Aurora Innovation and SEI Investments
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aurora and SEI is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Aurora Innovation and SEI Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEI Investments and Aurora Innovation 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 Aurora Innovation 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 Aurora Innovation i.e., Aurora Innovation and SEI Investments go up and down completely randomly.
Pair Corralation between Aurora Innovation and SEI Investments
Assuming the 90 days horizon Aurora Innovation is expected to generate 4.01 times less return on investment than SEI Investments. In addition to that, Aurora Innovation is 11.53 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 0.3 per unit of volatility. If you would invest 7,581 in SEI Investments on August 29, 2024 and sell it today you would earn a total of 663.00 from holding SEI Investments or generate 8.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aurora Innovation vs. SEI Investments
Performance |
| Timeline |
| Aurora Innovation |
| SEI Investments |
Aurora Innovation and SEI Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aurora Innovation and SEI Investments
The main advantage of trading using opposite Aurora Innovation and SEI Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aurora Innovation 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.The idea behind Aurora Innovation and SEI Investments pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| SEI Investments vs. Aurora Innovation | SEI Investments vs. HUMANA INC | SEI Investments vs. Aquagold International | SEI Investments vs. Barloworld Ltd ADR |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Other Complementary Tools
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Money Managers Screen money managers from public funds and ETFs managed around the world |