Correlation Between Goldman Sachs and SEI Investments
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs 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 Goldman Sachs and SEI Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goldman Sachs Group and SEI Investments, you can compare the effects of market volatilities on Goldman Sachs 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 Goldman Sachs with a short position of SEI Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and SEI Investments.
Diversification Opportunities for Goldman Sachs and SEI Investments
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Goldman and SEI is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Group and SEI Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEI Investments and Goldman Sachs 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 Goldman Sachs 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 Goldman Sachs i.e., Goldman Sachs and SEI Investments go up and down completely randomly.
Pair Corralation between Goldman Sachs and SEI Investments
Allowing for the 90-day total investment horizon Goldman Sachs Group is expected to generate 1.79 times more return on investment than SEI Investments. However, Goldman Sachs is 1.79 times more volatile than SEI Investments. It trades about 0.21 of its potential returns per unit of risk. SEI Investments is currently generating about 0.29 per unit of risk. If you would invest 49,114 in Goldman Sachs Group on August 26, 2024 and sell it today you would earn a total of 11,164 from holding Goldman Sachs Group or generate 22.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goldman Sachs Group vs. SEI Investments
Performance |
| Timeline |
| Goldman Sachs Group |
| SEI Investments |
Goldman Sachs and SEI Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and SEI Investments
The main advantage of trading using opposite Goldman Sachs and SEI Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs 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.| Goldman Sachs vs. Morgan Stanley | Goldman Sachs vs. JPMorgan Chase Co | Goldman Sachs vs. Wells Fargo | Goldman Sachs vs. Citigroup |
| SEI Investments vs. PowerUp Acquisition Corp | SEI Investments vs. Aurora Innovation | SEI Investments vs. HUMANA INC | SEI Investments vs. Aquagold International |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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