Correlation Between SEI INVESTMENTS and GBS Software
Can any of the company-specific risk be diversified away by investing in both SEI INVESTMENTS and GBS Software 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 GBS Software into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SEI INVESTMENTS and GBS Software AG, you can compare the effects of market volatilities on SEI INVESTMENTS and GBS Software 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 GBS Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of SEI INVESTMENTS and GBS Software.
Diversification Opportunities for SEI INVESTMENTS and GBS Software
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SEI and GBS is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding SEI INVESTMENTS and GBS Software AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GBS Software AG 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 GBS Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GBS Software AG has no effect on the direction of SEI INVESTMENTS i.e., SEI INVESTMENTS and GBS Software go up and down completely randomly.
Pair Corralation between SEI INVESTMENTS and GBS Software
Assuming the 90 days trading horizon SEI INVESTMENTS is expected to generate 1.2 times less return on investment than GBS Software. But when comparing it to its historical volatility, SEI INVESTMENTS is 2.46 times less risky than GBS Software. It trades about 0.08 of its potential returns per unit of risk. GBS Software AG is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 214.00 in GBS Software AG on October 16, 2024 and sell it today you would earn a total of 76.00 from holding GBS Software AG or generate 35.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SEI INVESTMENTS vs. GBS Software AG
Performance |
| Timeline |
| SEI INVESTMENTS |
| GBS Software AG |
SEI INVESTMENTS and GBS Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SEI INVESTMENTS and GBS Software
The main advantage of trading using opposite SEI INVESTMENTS and GBS Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SEI INVESTMENTS position performs unexpectedly, GBS Software 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 GBS Software will offset losses from the drop in GBS Software's long position.| SEI INVESTMENTS vs. APPLIED MATERIALS | SEI INVESTMENTS vs. VULCAN MATERIALS | SEI INVESTMENTS vs. The Yokohama Rubber | SEI INVESTMENTS vs. Plastic Omnium |
| GBS Software vs. Virtus Investment Partners | GBS Software vs. New Residential Investment | GBS Software vs. Infrastrutture Wireless Italiane | GBS Software vs. VIRGIN WINES UK |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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