Correlation Between SEI INVESTMENTS and National Bank
Can any of the company-specific risk be diversified away by investing in both SEI INVESTMENTS and National Bank 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 National Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SEI INVESTMENTS and National Bank Holdings, you can compare the effects of market volatilities on SEI INVESTMENTS and National Bank 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 National Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of SEI INVESTMENTS and National Bank.
Diversification Opportunities for SEI INVESTMENTS and National Bank
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between SEI and National is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding SEI INVESTMENTS and National Bank Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Bank Holdings 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 National Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Bank Holdings has no effect on the direction of SEI INVESTMENTS i.e., SEI INVESTMENTS and National Bank go up and down completely randomly.
Pair Corralation between SEI INVESTMENTS and National Bank
Assuming the 90 days trading horizon SEI INVESTMENTS is expected to generate 1.03 times less return on investment than National Bank. But when comparing it to its historical volatility, SEI INVESTMENTS is 3.26 times less risky than National Bank. It trades about 0.54 of its potential returns per unit of risk. National Bank Holdings is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 4,014 in National Bank Holdings on September 2, 2024 and sell it today you would earn a total of 466.00 from holding National Bank Holdings or generate 11.61% 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. National Bank Holdings
Performance |
| Timeline |
| SEI INVESTMENTS |
| National Bank Holdings |
SEI INVESTMENTS and National Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SEI INVESTMENTS and National Bank
The main advantage of trading using opposite SEI INVESTMENTS and National Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SEI INVESTMENTS position performs unexpectedly, National Bank 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 National Bank will offset losses from the drop in National Bank's long position.| SEI INVESTMENTS vs. Hyster Yale Materials Handling | SEI INVESTMENTS vs. Rayonier Advanced Materials | SEI INVESTMENTS vs. BORR DRILLING NEW | SEI INVESTMENTS vs. Sixt Leasing SE |
| National Bank vs. Eagle Materials | National Bank vs. Plastic Omnium | National Bank vs. SANOK RUBBER ZY | National Bank vs. Mitsubishi Materials |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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