Correlation Between SEI INVESTMENTS and GigaMedia
Can any of the company-specific risk be diversified away by investing in both SEI INVESTMENTS and GigaMedia 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 GigaMedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SEI INVESTMENTS and GigaMedia, you can compare the effects of market volatilities on SEI INVESTMENTS and GigaMedia 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 GigaMedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of SEI INVESTMENTS and GigaMedia.
Diversification Opportunities for SEI INVESTMENTS and GigaMedia
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between SEI and GigaMedia is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding SEI INVESTMENTS and GigaMedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GigaMedia 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 GigaMedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GigaMedia has no effect on the direction of SEI INVESTMENTS i.e., SEI INVESTMENTS and GigaMedia go up and down completely randomly.
Pair Corralation between SEI INVESTMENTS and GigaMedia
Assuming the 90 days trading horizon SEI INVESTMENTS is expected to generate 0.69 times more return on investment than GigaMedia. However, SEI INVESTMENTS is 1.44 times less risky than GigaMedia. It trades about 0.35 of its potential returns per unit of risk. GigaMedia is currently generating about 0.19 per unit of risk. If you would invest 6,900 in SEI INVESTMENTS on August 27, 2024 and sell it today you would earn a total of 850.00 from holding SEI INVESTMENTS or generate 12.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SEI INVESTMENTS vs. GigaMedia
Performance |
| Timeline |
| SEI INVESTMENTS |
| GigaMedia |
SEI INVESTMENTS and GigaMedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SEI INVESTMENTS and GigaMedia
The main advantage of trading using opposite SEI INVESTMENTS and GigaMedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SEI INVESTMENTS position performs unexpectedly, GigaMedia 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 GigaMedia will offset losses from the drop in GigaMedia's long position.| SEI INVESTMENTS vs. Apple Inc | SEI INVESTMENTS vs. Apple Inc | SEI INVESTMENTS vs. Apple Inc | SEI INVESTMENTS vs. Microsoft |
| GigaMedia vs. EAT WELL INVESTMENT | GigaMedia vs. GEAR4MUSIC LS 10 | GigaMedia vs. PACIFIC ONLINE | GigaMedia vs. BOS BETTER ONLINE |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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