Correlation Between SEI INVESTMENTS and Hua Hong
Can any of the company-specific risk be diversified away by investing in both SEI INVESTMENTS and Hua Hong 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 Hua Hong into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SEI INVESTMENTS and Hua Hong Semiconductor, you can compare the effects of market volatilities on SEI INVESTMENTS and Hua Hong 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 Hua Hong. Check out your portfolio center. Please also check ongoing floating volatility patterns of SEI INVESTMENTS and Hua Hong.
Diversification Opportunities for SEI INVESTMENTS and Hua Hong
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SEI and Hua is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding SEI INVESTMENTS and Hua Hong Semiconductor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hua Hong Semiconductor 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 Hua Hong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hua Hong Semiconductor has no effect on the direction of SEI INVESTMENTS i.e., SEI INVESTMENTS and Hua Hong go up and down completely randomly.
Pair Corralation between SEI INVESTMENTS and Hua Hong
Assuming the 90 days trading horizon SEI INVESTMENTS is expected to generate 2.62 times less return on investment than Hua Hong. But when comparing it to its historical volatility, SEI INVESTMENTS is 3.97 times less risky than Hua Hong. It trades about 0.11 of its potential returns per unit of risk. Hua Hong Semiconductor is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 165.00 in Hua Hong Semiconductor on October 12, 2024 and sell it today you would earn a total of 93.00 from holding Hua Hong Semiconductor or generate 56.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SEI INVESTMENTS vs. Hua Hong Semiconductor
Performance |
| Timeline |
| SEI INVESTMENTS |
| Hua Hong Semiconductor |
SEI INVESTMENTS and Hua Hong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SEI INVESTMENTS and Hua Hong
The main advantage of trading using opposite SEI INVESTMENTS and Hua Hong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SEI INVESTMENTS position performs unexpectedly, Hua Hong 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 Hua Hong will offset losses from the drop in Hua Hong's long position.| SEI INVESTMENTS vs. GOODYEAR T RUBBER | SEI INVESTMENTS vs. NORTHEAST UTILITIES | SEI INVESTMENTS vs. Cal Maine Foods | SEI INVESTMENTS vs. Performance Food Group |
| Hua Hong vs. Guangdong Investment Limited | Hua Hong vs. Auto Trader Group | Hua Hong vs. MARKET VECTR RETAIL | Hua Hong vs. PennantPark Investment |
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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