Correlation Between SEI Investments and DHI
Can any of the company-specific risk be diversified away by investing in both SEI Investments and DHI 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 DHI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SEI Investments and DHI Group, you can compare the effects of market volatilities on SEI Investments and DHI 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 DHI. Check out your portfolio center. Please also check ongoing floating volatility patterns of SEI Investments and DHI.
Diversification Opportunities for SEI Investments and DHI
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between SEI and DHI is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding SEI Investments and DHI Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DHI Group 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 DHI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DHI Group has no effect on the direction of SEI Investments i.e., SEI Investments and DHI go up and down completely randomly.
Pair Corralation between SEI Investments and DHI
Given the investment horizon of 90 days SEI Investments is expected to generate 0.3 times more return on investment than DHI. However, SEI Investments is 3.35 times less risky than DHI. It trades about 0.27 of its potential returns per unit of risk. DHI Group is currently generating about -0.08 per unit of risk. If you would invest 8,134 in SEI Investments on September 12, 2024 and sell it today you would earn a total of 408.00 from holding SEI Investments or generate 5.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SEI Investments vs. DHI Group
Performance |
| Timeline |
| SEI Investments |
| DHI Group |
SEI Investments and DHI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SEI Investments and DHI
The main advantage of trading using opposite SEI Investments and DHI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SEI Investments position performs unexpectedly, DHI 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 DHI will offset losses from the drop in DHI's long position.| SEI Investments vs. Stellus Capital Investment | SEI Investments vs. Prospect Capital | SEI Investments vs. Gladstone Capital | SEI Investments vs. Main Street Capital |
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 Valuation module to check real value of public entities based on technical and fundamental data.
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