Correlation Between SEI INVESTMENTS and Eagle Materials
Can any of the company-specific risk be diversified away by investing in both SEI INVESTMENTS and Eagle Materials 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 Eagle Materials into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SEI INVESTMENTS and Eagle Materials, you can compare the effects of market volatilities on SEI INVESTMENTS and Eagle Materials 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 Eagle Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of SEI INVESTMENTS and Eagle Materials.
Diversification Opportunities for SEI INVESTMENTS and Eagle Materials
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between SEI and Eagle is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding SEI INVESTMENTS and Eagle Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Materials 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 Eagle Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagle Materials has no effect on the direction of SEI INVESTMENTS i.e., SEI INVESTMENTS and Eagle Materials go up and down completely randomly.
Pair Corralation between SEI INVESTMENTS and Eagle Materials
Assuming the 90 days trading horizon SEI INVESTMENTS is expected to generate 1.09 times more return on investment than Eagle Materials. However, SEI INVESTMENTS is 1.09 times more volatile than Eagle Materials. It trades about 0.05 of its potential returns per unit of risk. Eagle Materials is currently generating about -0.52 per unit of risk. If you would invest 7,852 in SEI INVESTMENTS on October 11, 2024 and sell it today you would earn a total of 98.00 from holding SEI INVESTMENTS or generate 1.25% 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. Eagle Materials
Performance |
| Timeline |
| SEI INVESTMENTS |
| Eagle Materials |
SEI INVESTMENTS and Eagle Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SEI INVESTMENTS and Eagle Materials
The main advantage of trading using opposite SEI INVESTMENTS and Eagle Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SEI INVESTMENTS position performs unexpectedly, Eagle Materials 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 Eagle Materials will offset losses from the drop in Eagle Materials' 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 |
| Eagle Materials vs. SEI INVESTMENTS | Eagle Materials vs. SCIENCE IN SPORT | Eagle Materials vs. CHRYSALIS INVESTMENTS LTD | Eagle Materials vs. Keck Seng 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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