Correlation Between Grocery Outlet and SEI Investments
Can any of the company-specific risk be diversified away by investing in both Grocery Outlet 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 Grocery Outlet and SEI Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grocery Outlet Holding and SEI Investments, you can compare the effects of market volatilities on Grocery Outlet 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 Grocery Outlet with a short position of SEI Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grocery Outlet and SEI Investments.
Diversification Opportunities for Grocery Outlet and SEI Investments
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Grocery and SEI is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Grocery Outlet Holding and SEI Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEI Investments and Grocery Outlet 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 Grocery Outlet Holding 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 Grocery Outlet i.e., Grocery Outlet and SEI Investments go up and down completely randomly.
Pair Corralation between Grocery Outlet and SEI Investments
Allowing for the 90-day total investment horizon Grocery Outlet Holding is expected to under-perform the SEI Investments. In addition to that, Grocery Outlet is 2.22 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 0.07 per unit of volatility. If you would invest 5,997 in SEI Investments on August 31, 2024 and sell it today you would earn a total of 2,266 from holding SEI Investments or generate 37.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Grocery Outlet Holding vs. SEI Investments
Performance |
| Timeline |
| Grocery Outlet Holding |
| SEI Investments |
Grocery Outlet and SEI Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grocery Outlet and SEI Investments
The main advantage of trading using opposite Grocery Outlet and SEI Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grocery Outlet 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.| Grocery Outlet vs. Natural Grocers by | Grocery Outlet vs. Village Super Market | Grocery Outlet vs. Ingles Markets Incorporated | Grocery Outlet vs. Ocado Group plc |
| SEI Investments vs. Commerce Bancshares | SEI Investments vs. RLI Corp | SEI Investments vs. Westamerica Bancorporation | SEI Investments vs. Brown Brown |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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