Correlation Between SEI Exchange and Listed Funds
Can any of the company-specific risk be diversified away by investing in both SEI Exchange and Listed Funds 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 Exchange and Listed Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SEI Exchange Traded and Listed Funds Trust, you can compare the effects of market volatilities on SEI Exchange and Listed Funds 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 Exchange with a short position of Listed Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of SEI Exchange and Listed Funds.
Diversification Opportunities for SEI Exchange and Listed Funds
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SEI and Listed is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding SEI Exchange Traded and Listed Funds Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Listed Funds Trust and SEI Exchange 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 Exchange Traded are associated (or correlated) with Listed Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Listed Funds Trust has no effect on the direction of SEI Exchange i.e., SEI Exchange and Listed Funds go up and down completely randomly.
Pair Corralation between SEI Exchange and Listed Funds
Given the investment horizon of 90 days SEI Exchange Traded is expected to generate 8.21 times more return on investment than Listed Funds. However, SEI Exchange is 8.21 times more volatile than Listed Funds Trust. It trades about 0.22 of its potential returns per unit of risk. Listed Funds Trust is currently generating about -0.17 per unit of risk. If you would invest 3,325 in SEI Exchange Traded on August 30, 2024 and sell it today you would earn a total of 146.00 from holding SEI Exchange Traded or generate 4.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SEI Exchange Traded vs. Listed Funds Trust
Performance |
| Timeline |
| SEI Exchange Traded |
| Listed Funds Trust |
SEI Exchange and Listed Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SEI Exchange and Listed Funds
The main advantage of trading using opposite SEI Exchange and Listed Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SEI Exchange position performs unexpectedly, Listed Funds 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 Listed Funds will offset losses from the drop in Listed Funds' long position.| SEI Exchange vs. FT Vest Equity | SEI Exchange vs. Northern Lights | SEI Exchange vs. Dimensional International High | SEI Exchange vs. First Trust Exchange Traded |
| Listed Funds vs. Vanguard Industrials Index | Listed Funds vs. Vanguard Consumer Discretionary | Listed Funds vs. Vanguard Materials Index | Listed Funds vs. Vanguard Health Care |
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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