Correlation Between SEI Investments and CapitaLand Investment
Can any of the company-specific risk be diversified away by investing in both SEI Investments and CapitaLand Investment 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 CapitaLand Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SEI Investments and CapitaLand Investment Limited, you can compare the effects of market volatilities on SEI Investments and CapitaLand Investment 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 CapitaLand Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of SEI Investments and CapitaLand Investment.
Diversification Opportunities for SEI Investments and CapitaLand Investment
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SEI and CapitaLand is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding SEI Investments and CapitaLand Investment Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CapitaLand Investment 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 CapitaLand Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CapitaLand Investment has no effect on the direction of SEI Investments i.e., SEI Investments and CapitaLand Investment go up and down completely randomly.
Pair Corralation between SEI Investments and CapitaLand Investment
Given the investment horizon of 90 days SEI Investments is expected to generate 0.57 times more return on investment than CapitaLand Investment. However, SEI Investments is 1.76 times less risky than CapitaLand Investment. It trades about 0.32 of its potential returns per unit of risk. CapitaLand Investment Limited is currently generating about -0.23 per unit of risk. If you would invest 6,934 in SEI Investments on September 3, 2024 and sell it today you would earn a total of 1,329 from holding SEI Investments or generate 19.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SEI Investments vs. CapitaLand Investment Limited
Performance |
| Timeline |
| SEI Investments |
| CapitaLand Investment |
SEI Investments and CapitaLand Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SEI Investments and CapitaLand Investment
The main advantage of trading using opposite SEI Investments and CapitaLand Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SEI Investments position performs unexpectedly, CapitaLand Investment 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 CapitaLand Investment will offset losses from the drop in CapitaLand Investment's long position.| SEI Investments vs. Commerce Bancshares | SEI Investments vs. RLI Corp | SEI Investments vs. Westamerica Bancorporation | SEI Investments vs. Brown Brown |
| CapitaLand Investment vs. IRSA Inversiones Y | CapitaLand Investment vs. Anywhere Real Estate | CapitaLand Investment vs. Newmark Group | CapitaLand Investment vs. Wharf Real Estate |
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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