Correlation Between SEI Investments and BAIYU Holdings
Can any of the company-specific risk be diversified away by investing in both SEI Investments and BAIYU Holdings 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 SEI Investments and BAIYU Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SEI Investments and BAIYU Holdings, you can compare the effects of market volatilities on SEI Investments and BAIYU Holdings 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 SEI Investments with a short position of BAIYU Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of SEI Investments and BAIYU Holdings.
Diversification Opportunities for SEI Investments and BAIYU Holdings
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SEI and BAIYU is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding SEI Investments and BAIYU Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BAIYU Holdings and SEI Investments 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 SEI Investments are associated (or correlated) with BAIYU Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BAIYU Holdings has no effect on the direction of SEI Investments i.e., SEI Investments and BAIYU Holdings go up and down completely randomly.
Pair Corralation between SEI Investments and BAIYU Holdings
Given the investment horizon of 90 days SEI Investments is expected to generate 0.11 times more return on investment than BAIYU Holdings. However, SEI Investments is 8.82 times less risky than BAIYU Holdings. It trades about 0.09 of its potential returns per unit of risk. BAIYU Holdings is currently generating about -0.04 per unit of risk. If you would invest 7,012 in SEI Investments on September 3, 2024 and sell it today you would earn a total of 1,251 from holding SEI Investments or generate 17.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 96.39% |
| Values | Daily Returns |
SEI Investments vs. BAIYU Holdings
Performance |
| Timeline |
| SEI Investments |
| BAIYU Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
SEI Investments and BAIYU Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SEI Investments and BAIYU Holdings
The main advantage of trading using opposite SEI Investments and BAIYU Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SEI Investments position performs unexpectedly, BAIYU Holdings 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 BAIYU Holdings will offset losses from the drop in BAIYU Holdings' long position.| SEI Investments vs. Commerce Bancshares | SEI Investments vs. RLI Corp | SEI Investments vs. Westamerica Bancorporation | SEI Investments vs. Brown Brown |
| BAIYU Holdings vs. Jeld Wen Holding | BAIYU Holdings vs. National Beverage Corp | BAIYU Holdings vs. Constellation Brands Class | BAIYU Holdings vs. Willamette Valley Vineyards |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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