Correlation Between MSCI ACWI and SEI Investments
Can any of the company-specific risk be diversified away by investing in both MSCI ACWI 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 MSCI ACWI and SEI Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MSCI ACWI exAUCONSUMER and SEI Investments, you can compare the effects of market volatilities on MSCI ACWI 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 MSCI ACWI with a short position of SEI Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of MSCI ACWI and SEI Investments.
Diversification Opportunities for MSCI ACWI and SEI Investments
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between MSCI and SEI is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding MSCI ACWI exAUCONSUMER and SEI Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEI Investments and MSCI ACWI 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 MSCI ACWI exAUCONSUMER 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 MSCI ACWI i.e., MSCI ACWI and SEI Investments go up and down completely randomly.
Pair Corralation between MSCI ACWI and SEI Investments
Assuming the 90 days horizon MSCI ACWI is expected to generate 3.54 times less return on investment than SEI Investments. But when comparing it to its historical volatility, MSCI ACWI exAUCONSUMER is 4.67 times less risky than SEI Investments. It trades about 0.16 of its potential returns per unit of risk. SEI Investments is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 5,784 in SEI Investments on August 26, 2024 and sell it today you would earn a total of 2,298 from holding SEI Investments or generate 39.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
MSCI ACWI exAUCONSUMER vs. SEI Investments
Performance |
| Timeline |
| MSCI ACWI exAUCONSUMER |
| SEI Investments |
MSCI ACWI and SEI Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MSCI ACWI and SEI Investments
The main advantage of trading using opposite MSCI ACWI and SEI Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MSCI ACWI 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.| MSCI ACWI vs. Doubleline Yield Opportunities | MSCI ACWI vs. PIMCO Access Income | MSCI ACWI vs. Blackrock Innovation Growth | MSCI ACWI vs. Cohen Steers Tax Advantaged |
| 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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