Correlation Between CHINA EDUCATION and SEI INVESTMENTS
Can any of the company-specific risk be diversified away by investing in both CHINA EDUCATION 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 CHINA EDUCATION and SEI INVESTMENTS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CHINA EDUCATION GROUP and SEI INVESTMENTS, you can compare the effects of market volatilities on CHINA EDUCATION 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 CHINA EDUCATION with a short position of SEI INVESTMENTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHINA EDUCATION and SEI INVESTMENTS.
Diversification Opportunities for CHINA EDUCATION and SEI INVESTMENTS
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CHINA and SEI is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding CHINA EDUCATION GROUP and SEI INVESTMENTS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEI INVESTMENTS and CHINA EDUCATION 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 CHINA EDUCATION 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 CHINA EDUCATION i.e., CHINA EDUCATION and SEI INVESTMENTS go up and down completely randomly.
Pair Corralation between CHINA EDUCATION and SEI INVESTMENTS
Assuming the 90 days horizon CHINA EDUCATION GROUP is expected to under-perform the SEI INVESTMENTS. In addition to that, CHINA EDUCATION is 2.95 times more volatile than SEI INVESTMENTS. It trades about -0.23 of its total potential returns per unit of risk. SEI INVESTMENTS is currently generating about 0.36 per unit of volatility. If you would invest 6,900 in SEI INVESTMENTS on August 31, 2024 and sell it today you would earn a total of 900.00 from holding SEI INVESTMENTS or generate 13.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CHINA EDUCATION GROUP vs. SEI INVESTMENTS
Performance |
| Timeline |
| CHINA EDUCATION GROUP |
| SEI INVESTMENTS |
CHINA EDUCATION and SEI INVESTMENTS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CHINA EDUCATION and SEI INVESTMENTS
The main advantage of trading using opposite CHINA EDUCATION and SEI INVESTMENTS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHINA EDUCATION 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.| CHINA EDUCATION vs. Apple Inc | CHINA EDUCATION vs. Apple Inc | CHINA EDUCATION vs. Apple Inc | CHINA EDUCATION vs. Apple Inc |
| SEI INVESTMENTS vs. SIVERS SEMICONDUCTORS AB | SEI INVESTMENTS vs. Darden Restaurants | SEI INVESTMENTS vs. Reliance Steel Aluminum | SEI INVESTMENTS vs. Q2M Managementberatung AG |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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