Correlation Between SEI Investments and Dow Jones
Can any of the company-specific risk be diversified away by investing in both SEI Investments and Dow Jones 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 Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SEI Investments and Dow Jones Islamic, you can compare the effects of market volatilities on SEI Investments and Dow Jones 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 Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of SEI Investments and Dow Jones.
Diversification Opportunities for SEI Investments and Dow Jones
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between SEI and Dow is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding SEI Investments and Dow Jones Islamic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Islamic 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 Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Islamic has no effect on the direction of SEI Investments i.e., SEI Investments and Dow Jones go up and down completely randomly.
Pair Corralation between SEI Investments and Dow Jones
Given the investment horizon of 90 days SEI Investments is expected to generate 1.21 times less return on investment than Dow Jones. In addition to that, SEI Investments is 1.21 times more volatile than Dow Jones Islamic. It trades about 0.08 of its total potential returns per unit of risk. Dow Jones Islamic is currently generating about 0.12 per unit of volatility. If you would invest 733,202 in Dow Jones Islamic on September 12, 2024 and sell it today you would earn a total of 500,707 from holding Dow Jones Islamic or generate 68.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 97.06% |
| Values | Daily Returns |
SEI Investments vs. Dow Jones Islamic
Performance |
| Timeline |
SEI Investments and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
SEI Investments
Pair trading matchups for SEI Investments
Dow Jones Islamic
Pair trading matchups for Dow Jones
Pair Trading with SEI Investments and Dow Jones
The main advantage of trading using opposite SEI Investments and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SEI Investments position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| SEI Investments vs. Gladstone Investment | SEI Investments vs. Stellus Capital Investment | SEI Investments vs. Prospect Capital | SEI Investments vs. Gladstone Capital |
| Dow Jones vs. Eastman Chemical | Dow Jones vs. Tianjin Capital Environmental | Dow Jones vs. Ironveld Plc | Dow Jones vs. Sensient Technologies |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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