Correlation Between SEI INVESTMENTS and LG Electronics
Can any of the company-specific risk be diversified away by investing in both SEI INVESTMENTS and LG Electronics 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 LG Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SEI INVESTMENTS and LG Electronics, you can compare the effects of market volatilities on SEI INVESTMENTS and LG Electronics 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 LG Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of SEI INVESTMENTS and LG Electronics.
Diversification Opportunities for SEI INVESTMENTS and LG Electronics
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SEI and LGLG is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding SEI INVESTMENTS and LG Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG Electronics 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 LG Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LG Electronics has no effect on the direction of SEI INVESTMENTS i.e., SEI INVESTMENTS and LG Electronics go up and down completely randomly.
Pair Corralation between SEI INVESTMENTS and LG Electronics
Assuming the 90 days trading horizon SEI INVESTMENTS is expected to generate 0.31 times more return on investment than LG Electronics. However, SEI INVESTMENTS is 3.23 times less risky than LG Electronics. It trades about 0.09 of its potential returns per unit of risk. LG Electronics is currently generating about 0.0 per unit of risk. If you would invest 5,486 in SEI INVESTMENTS on October 11, 2024 and sell it today you would earn a total of 2,464 from holding SEI INVESTMENTS or generate 44.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SEI INVESTMENTS vs. LG Electronics
Performance |
| Timeline |
| SEI INVESTMENTS |
| LG Electronics |
SEI INVESTMENTS and LG Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SEI INVESTMENTS and LG Electronics
The main advantage of trading using opposite SEI INVESTMENTS and LG Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SEI INVESTMENTS position performs unexpectedly, LG Electronics 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 LG Electronics will offset losses from the drop in LG Electronics' 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 |
| LG Electronics vs. GRUPO CARSO A1 | LG Electronics vs. Commercial Vehicle Group | LG Electronics vs. Hochschild Mining plc | LG Electronics vs. CONTAGIOUS GAMING 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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