Correlation Between Global Ship and SEI Investments
Can any of the company-specific risk be diversified away by investing in both Global Ship 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 Global Ship and SEI Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Ship Lease and SEI Investments, you can compare the effects of market volatilities on Global Ship 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 Global Ship with a short position of SEI Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Ship and SEI Investments.
Diversification Opportunities for Global Ship and SEI Investments
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Global and SEI is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Global Ship Lease and SEI Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEI Investments and Global Ship 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 Global Ship Lease 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 Global Ship i.e., Global Ship and SEI Investments go up and down completely randomly.
Pair Corralation between Global Ship and SEI Investments
Assuming the 90 days trading horizon Global Ship is expected to generate 7.44 times less return on investment than SEI Investments. But when comparing it to its historical volatility, Global Ship Lease is 1.86 times less risky than SEI Investments. It trades about 0.09 of its potential returns per unit of risk. SEI Investments is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest 6,658 in SEI Investments on September 12, 2024 and sell it today you would earn a total of 1,916 from holding SEI Investments or generate 28.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.44% |
| Values | Daily Returns |
Global Ship Lease vs. SEI Investments
Performance |
| Timeline |
| Global Ship Lease |
| SEI Investments |
Global Ship and SEI Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Ship and SEI Investments
The main advantage of trading using opposite Global Ship and SEI Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Ship 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.| Global Ship vs. Safe Bulkers | Global Ship vs. Diana Shipping | Global Ship vs. Costamare | Global Ship vs. Safe Bulkers |
| 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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