Correlation Between SEI Investments and GEN Restaurant
Can any of the company-specific risk be diversified away by investing in both SEI Investments and GEN Restaurant 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 GEN Restaurant into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SEI Investments and GEN Restaurant Group,, you can compare the effects of market volatilities on SEI Investments and GEN Restaurant 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 GEN Restaurant. Check out your portfolio center. Please also check ongoing floating volatility patterns of SEI Investments and GEN Restaurant.
Diversification Opportunities for SEI Investments and GEN Restaurant
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between SEI and GEN is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding SEI Investments and GEN Restaurant Group, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GEN Restaurant 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 GEN Restaurant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GEN Restaurant Group, has no effect on the direction of SEI Investments i.e., SEI Investments and GEN Restaurant go up and down completely randomly.
Pair Corralation between SEI Investments and GEN Restaurant
Given the investment horizon of 90 days SEI Investments is expected to generate 0.23 times more return on investment than GEN Restaurant. However, SEI Investments is 4.36 times less risky than GEN Restaurant. It trades about 0.35 of its potential returns per unit of risk. GEN Restaurant Group, is currently generating about -0.03 per unit of risk. If you would invest 7,581 in SEI Investments on September 2, 2024 and sell it today you would earn a total of 682.00 from holding SEI Investments or generate 9.0% 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. GEN Restaurant Group,
Performance |
| Timeline |
| SEI Investments |
| GEN Restaurant Group, |
SEI Investments and GEN Restaurant Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SEI Investments and GEN Restaurant
The main advantage of trading using opposite SEI Investments and GEN Restaurant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SEI Investments position performs unexpectedly, GEN Restaurant 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 GEN Restaurant will offset losses from the drop in GEN Restaurant's long position.| SEI Investments vs. Visa Class A | SEI Investments vs. Diamond Hill Investment | SEI Investments vs. Distoken Acquisition | SEI Investments vs. Associated Capital Group |
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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