Correlation Between China Communications and SEI INVESTMENTS
Can any of the company-specific risk be diversified away by investing in both China Communications 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 Communications 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 Communications Services and SEI INVESTMENTS, you can compare the effects of market volatilities on China Communications 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 Communications with a short position of SEI INVESTMENTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Communications and SEI INVESTMENTS.
Diversification Opportunities for China Communications and SEI INVESTMENTS
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between China and SEI is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding China Communications Services and SEI INVESTMENTS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEI INVESTMENTS and China Communications 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 Communications Services 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 Communications i.e., China Communications and SEI INVESTMENTS go up and down completely randomly.
Pair Corralation between China Communications and SEI INVESTMENTS
Assuming the 90 days horizon China Communications Services is expected to under-perform the SEI INVESTMENTS. In addition to that, China Communications is 1.41 times more volatile than SEI INVESTMENTS. It trades about -0.06 of its total potential returns per unit of risk. SEI INVESTMENTS is currently generating about 0.16 per unit of volatility. If you would invest 8,000 in SEI INVESTMENTS on November 3, 2024 and sell it today you would earn a total of 250.00 from holding SEI INVESTMENTS or generate 3.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Communications Services vs. SEI INVESTMENTS
Performance |
| Timeline |
| China Communications |
| SEI INVESTMENTS |
China Communications and SEI INVESTMENTS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Communications and SEI INVESTMENTS
The main advantage of trading using opposite China Communications and SEI INVESTMENTS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Communications 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 Communications vs. GALENA MINING LTD | China Communications vs. Highlight Communications AG | China Communications vs. Verizon Communications | China Communications vs. ecotel communication ag |
| SEI INVESTMENTS vs. ADRIATIC METALS LS 013355 | SEI INVESTMENTS vs. Western Copper and | SEI INVESTMENTS vs. De Grey Mining | SEI INVESTMENTS vs. Molson Coors Beverage |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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