Correlation Between SEI INVESTMENTS and ROMERIKE SPAREBANK
Can any of the company-specific risk be diversified away by investing in both SEI INVESTMENTS and ROMERIKE SPAREBANK 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 ROMERIKE SPAREBANK into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SEI INVESTMENTS and ROMERIKE SPAREBANK NK, you can compare the effects of market volatilities on SEI INVESTMENTS and ROMERIKE SPAREBANK 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 ROMERIKE SPAREBANK. Check out your portfolio center. Please also check ongoing floating volatility patterns of SEI INVESTMENTS and ROMERIKE SPAREBANK.
Diversification Opportunities for SEI INVESTMENTS and ROMERIKE SPAREBANK
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SEI and ROMERIKE is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding SEI INVESTMENTS and ROMERIKE SPAREBANK NK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ROMERIKE SPAREBANK 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 ROMERIKE SPAREBANK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ROMERIKE SPAREBANK has no effect on the direction of SEI INVESTMENTS i.e., SEI INVESTMENTS and ROMERIKE SPAREBANK go up and down completely randomly.
Pair Corralation between SEI INVESTMENTS and ROMERIKE SPAREBANK
Assuming the 90 days trading horizon SEI INVESTMENTS is expected to generate 15.0 times less return on investment than ROMERIKE SPAREBANK. But when comparing it to its historical volatility, SEI INVESTMENTS is 30.91 times less risky than ROMERIKE SPAREBANK. It trades about 0.08 of its potential returns per unit of risk. ROMERIKE SPAREBANK NK is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,093 in ROMERIKE SPAREBANK NK on September 2, 2024 and sell it today you would lose (22.00) from holding ROMERIKE SPAREBANK NK or give up 2.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
SEI INVESTMENTS vs. ROMERIKE SPAREBANK NK
Performance |
| Timeline |
| SEI INVESTMENTS |
| ROMERIKE SPAREBANK |
SEI INVESTMENTS and ROMERIKE SPAREBANK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SEI INVESTMENTS and ROMERIKE SPAREBANK
The main advantage of trading using opposite SEI INVESTMENTS and ROMERIKE SPAREBANK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SEI INVESTMENTS position performs unexpectedly, ROMERIKE SPAREBANK 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 ROMERIKE SPAREBANK will offset losses from the drop in ROMERIKE SPAREBANK's long position.| SEI INVESTMENTS vs. Hyster Yale Materials Handling | SEI INVESTMENTS vs. Rayonier Advanced Materials | SEI INVESTMENTS vs. BORR DRILLING NEW | SEI INVESTMENTS vs. Sixt Leasing SE |
| ROMERIKE SPAREBANK vs. Siamgas And Petrochemicals | ROMERIKE SPAREBANK vs. AIR PRODCHEMICALS | ROMERIKE SPAREBANK vs. SLR Investment Corp | ROMERIKE SPAREBANK vs. SEI INVESTMENTS |
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