Correlation Between SEI INVESTMENTS and AECOM TECHNOLOGY
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 Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
SEI INVESTMENTS vs. AECOM TECHNOLOGY
Performance |
Timeline |
SEI INVESTMENTS |
AECOM TECHNOLOGY |
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.SEI INVESTMENTS vs. COLUMBIA SPORTSWEAR | SEI INVESTMENTS vs. Playa Hotels Resorts | SEI INVESTMENTS vs. PLAYSTUDIOS A DL 0001 | SEI INVESTMENTS vs. USWE SPORTS AB |
AECOM TECHNOLOGY vs. Apple Inc | AECOM TECHNOLOGY vs. Apple Inc | AECOM TECHNOLOGY vs. Apple Inc | AECOM TECHNOLOGY vs. Apple Inc |
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.
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