Correlation Between SEI INVESTMENTS and AECOM TECHNOLOGY

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both SEI INVESTMENTS and AECOM TECHNOLOGY 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 AECOM TECHNOLOGY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SEI INVESTMENTS and AECOM TECHNOLOGY, you can compare the effects of market volatilities on SEI INVESTMENTS and AECOM TECHNOLOGY 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 AECOM TECHNOLOGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of SEI INVESTMENTS and AECOM TECHNOLOGY.

Diversification Opportunities for SEI INVESTMENTS and AECOM TECHNOLOGY

0.68
  Correlation Coefficient

Poor diversification

The 3 months correlation between SEI and AECOM is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding SEI INVESTMENTS and AECOM TECHNOLOGY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AECOM TECHNOLOGY 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 AECOM TECHNOLOGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AECOM TECHNOLOGY has no effect on the direction of SEI INVESTMENTS i.e., SEI INVESTMENTS and AECOM TECHNOLOGY go up and down completely randomly.

Pair Corralation between SEI INVESTMENTS and AECOM TECHNOLOGY

Assuming the 90 days trading horizon SEI INVESTMENTS is expected to generate 1.07 times more return on investment than AECOM TECHNOLOGY. However, SEI INVESTMENTS is 1.07 times more volatile than AECOM TECHNOLOGY. It trades about 0.12 of its potential returns per unit of risk. AECOM TECHNOLOGY is currently generating about -0.17 per unit of risk. If you would invest  7,703  in SEI INVESTMENTS on October 28, 2024 and sell it today you would earn a total of  397.00  from holding SEI INVESTMENTS or generate 5.15% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

SEI INVESTMENTS  vs.  AECOM TECHNOLOGY

 Performance 
       Timeline  
SEI INVESTMENTS 

Risk-Adjusted Performance

16 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in SEI INVESTMENTS are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, SEI INVESTMENTS unveiled solid returns over the last few months and may actually be approaching a breakup point.
AECOM TECHNOLOGY 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in AECOM TECHNOLOGY are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, AECOM TECHNOLOGY may actually be approaching a critical reversion point that can send shares even higher in February 2025.

SEI INVESTMENTS and AECOM TECHNOLOGY Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with SEI INVESTMENTS and AECOM TECHNOLOGY

The main advantage of trading using opposite SEI INVESTMENTS and AECOM TECHNOLOGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SEI INVESTMENTS position performs unexpectedly, AECOM TECHNOLOGY 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 AECOM TECHNOLOGY will offset losses from the drop in AECOM TECHNOLOGY's long position.
The idea behind SEI INVESTMENTS and AECOM TECHNOLOGY pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.

Other Complementary Tools

Sign In To Macroaxis
Sign in to explore Macroaxis' wealth optimization platform and fintech modules
Portfolio Comparator
Compare the composition, asset allocations and performance of any two portfolios in your account
Instant Ratings
Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance
Bollinger Bands
Use Bollinger Bands indicator to analyze target price for a given investing horizon
Portfolio Diagnostics
Use generated alerts and portfolio events aggregator to diagnose current holdings