Correlation Between SEI INVESTMENTS and MAGNA INTL
Can any of the company-specific risk be diversified away by investing in both SEI INVESTMENTS and MAGNA INTL 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 MAGNA INTL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SEI INVESTMENTS and MAGNA INTL, you can compare the effects of market volatilities on SEI INVESTMENTS and MAGNA INTL 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 MAGNA INTL. Check out your portfolio center. Please also check ongoing floating volatility patterns of SEI INVESTMENTS and MAGNA INTL.
Diversification Opportunities for SEI INVESTMENTS and MAGNA INTL
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between SEI and MAGNA is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding SEI INVESTMENTS and MAGNA INTL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MAGNA INTL 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 MAGNA INTL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MAGNA INTL has no effect on the direction of SEI INVESTMENTS i.e., SEI INVESTMENTS and MAGNA INTL go up and down completely randomly.
Pair Corralation between SEI INVESTMENTS and MAGNA INTL
Assuming the 90 days trading horizon SEI INVESTMENTS is expected to generate 0.45 times more return on investment than MAGNA INTL. However, SEI INVESTMENTS is 2.2 times less risky than MAGNA INTL. It trades about 0.1 of its potential returns per unit of risk. MAGNA INTL is currently generating about 0.0 per unit of risk. If you would invest 5,373 in SEI INVESTMENTS on September 14, 2024 and sell it today you would earn a total of 2,827 from holding SEI INVESTMENTS or generate 52.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
SEI INVESTMENTS vs. MAGNA INTL
Performance |
| Timeline |
| SEI INVESTMENTS |
| MAGNA INTL |
SEI INVESTMENTS and MAGNA INTL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SEI INVESTMENTS and MAGNA INTL
The main advantage of trading using opposite SEI INVESTMENTS and MAGNA INTL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SEI INVESTMENTS position performs unexpectedly, MAGNA INTL 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 MAGNA INTL will offset losses from the drop in MAGNA INTL's long position.| SEI INVESTMENTS vs. Apple Inc | SEI INVESTMENTS vs. Apple Inc | SEI INVESTMENTS vs. Apple Inc | SEI INVESTMENTS vs. Apple Inc |
| MAGNA INTL vs. Apollo Investment Corp | MAGNA INTL vs. EAT WELL INVESTMENT | MAGNA INTL vs. SEI INVESTMENTS | MAGNA INTL vs. SLR Investment Corp |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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