Correlation Between SEI Investments and United Homes
Can any of the company-specific risk be diversified away by investing in both SEI Investments and United Homes 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 United Homes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SEI Investments and United Homes Group, you can compare the effects of market volatilities on SEI Investments and United Homes 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 United Homes. Check out your portfolio center. Please also check ongoing floating volatility patterns of SEI Investments and United Homes.
Diversification Opportunities for SEI Investments and United Homes
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SEI and United is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding SEI Investments and United Homes Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Homes 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 United Homes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Homes Group has no effect on the direction of SEI Investments i.e., SEI Investments and United Homes go up and down completely randomly.
Pair Corralation between SEI Investments and United Homes
Given the investment horizon of 90 days SEI Investments is expected to generate 1.39 times less return on investment than United Homes. But when comparing it to its historical volatility, SEI Investments is 6.2 times less risky than United Homes. It trades about 0.07 of its potential returns per unit of risk. United Homes Group is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1,009 in United Homes Group on September 3, 2024 and sell it today you would lose (371.00) from holding United Homes Group or give up 36.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SEI Investments vs. United Homes Group
Performance |
| Timeline |
| SEI Investments |
| United Homes Group |
SEI Investments and United Homes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SEI Investments and United Homes
The main advantage of trading using opposite SEI Investments and United Homes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SEI Investments position performs unexpectedly, United Homes 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 United Homes will offset losses from the drop in United Homes' long position.| SEI Investments vs. Commerce Bancshares | SEI Investments vs. RLI Corp | SEI Investments vs. Westamerica Bancorporation | SEI Investments vs. Brown Brown |
| United Homes vs. Aegon NV ADR | United Homes vs. Sphere Entertainment Co | United Homes vs. Old Republic International | United Homes vs. SEI Investments |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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