Correlation Between SEI Investments and Koppers Holdings
Can any of the company-specific risk be diversified away by investing in both SEI Investments and Koppers Holdings 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 Koppers Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SEI Investments and Koppers Holdings, you can compare the effects of market volatilities on SEI Investments and Koppers Holdings 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 Koppers Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of SEI Investments and Koppers Holdings.
Diversification Opportunities for SEI Investments and Koppers Holdings
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between SEI and Koppers is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding SEI Investments and Koppers Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Koppers Holdings 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 Koppers Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Koppers Holdings has no effect on the direction of SEI Investments i.e., SEI Investments and Koppers Holdings go up and down completely randomly.
Pair Corralation between SEI Investments and Koppers Holdings
Given the investment horizon of 90 days SEI Investments is expected to generate 1.65 times less return on investment than Koppers Holdings. But when comparing it to its historical volatility, SEI Investments is 2.41 times less risky than Koppers Holdings. It trades about 0.27 of its potential returns per unit of risk. Koppers Holdings is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 3,481 in Koppers Holdings on August 28, 2024 and sell it today you would earn a total of 421.00 from holding Koppers Holdings or generate 12.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SEI Investments vs. Koppers Holdings
Performance |
| Timeline |
| SEI Investments |
| Koppers Holdings |
SEI Investments and Koppers Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SEI Investments and Koppers Holdings
The main advantage of trading using opposite SEI Investments and Koppers Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SEI Investments position performs unexpectedly, Koppers Holdings 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 Koppers Holdings will offset losses from the drop in Koppers Holdings' long position.| SEI Investments vs. Commerce Bancshares | SEI Investments vs. RLI Corp | SEI Investments vs. Westamerica Bancorporation | SEI Investments vs. Brown Brown |
| Koppers Holdings vs. H B Fuller | Koppers Holdings vs. Minerals Technologies | Koppers Holdings vs. Quaker Chemical | Koppers Holdings vs. Oil Dri |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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