Correlation Between Bright Scholar and SEI Investments
Can any of the company-specific risk be diversified away by investing in both Bright Scholar 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 Bright Scholar and SEI Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bright Scholar Education and SEI Investments, you can compare the effects of market volatilities on Bright Scholar 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 Bright Scholar with a short position of SEI Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bright Scholar and SEI Investments.
Diversification Opportunities for Bright Scholar and SEI Investments
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bright and SEI is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Bright Scholar Education and SEI Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEI Investments and Bright Scholar 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 Bright Scholar Education 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 Bright Scholar i.e., Bright Scholar and SEI Investments go up and down completely randomly.
Pair Corralation between Bright Scholar and SEI Investments
Given the investment horizon of 90 days Bright Scholar Education is expected to under-perform the SEI Investments. In addition to that, Bright Scholar is 2.11 times more volatile than SEI Investments. It trades about -0.24 of its total potential returns per unit of risk. SEI Investments is currently generating about 0.4 per unit of volatility. If you would invest 7,476 in SEI Investments on September 1, 2024 and sell it today you would earn a total of 787.00 from holding SEI Investments or generate 10.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bright Scholar Education vs. SEI Investments
Performance |
| Timeline |
| Bright Scholar Education |
| SEI Investments |
Bright Scholar and SEI Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bright Scholar and SEI Investments
The main advantage of trading using opposite Bright Scholar and SEI Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bright Scholar 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.| Bright Scholar vs. American Public Education | Bright Scholar vs. ATA Creativity Global | Bright Scholar vs. Cogna Educacao SA | Bright Scholar vs. Adtalem Global Education |
| SEI Investments vs. Visa Class A | SEI Investments vs. Diamond Hill Investment | SEI Investments vs. Distoken Acquisition | SEI Investments vs. Associated Capital Group |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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