Correlation Between SEI Investments and Eldorado Gold
Can any of the company-specific risk be diversified away by investing in both SEI Investments and Eldorado Gold 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 Eldorado Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SEI Investments and Eldorado Gold Corp, you can compare the effects of market volatilities on SEI Investments and Eldorado Gold 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 Eldorado Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of SEI Investments and Eldorado Gold.
Diversification Opportunities for SEI Investments and Eldorado Gold
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SEI and Eldorado is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding SEI Investments and Eldorado Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eldorado Gold Corp 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 Eldorado Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eldorado Gold Corp has no effect on the direction of SEI Investments i.e., SEI Investments and Eldorado Gold go up and down completely randomly.
Pair Corralation between SEI Investments and Eldorado Gold
Given the investment horizon of 90 days SEI Investments is expected to generate 2.55 times less return on investment than Eldorado Gold. But when comparing it to its historical volatility, SEI Investments is 2.03 times less risky than Eldorado Gold. It trades about 0.09 of its potential returns per unit of risk. Eldorado Gold Corp is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 1,039 in Eldorado Gold Corp on August 27, 2024 and sell it today you would earn a total of 617.00 from holding Eldorado Gold Corp or generate 59.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SEI Investments vs. Eldorado Gold Corp
Performance |
| Timeline |
| SEI Investments |
| Eldorado Gold Corp |
SEI Investments and Eldorado Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SEI Investments and Eldorado Gold
The main advantage of trading using opposite SEI Investments and Eldorado Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SEI Investments position performs unexpectedly, Eldorado Gold 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 Eldorado Gold will offset losses from the drop in Eldorado Gold's long position.| 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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