Correlation Between SEI INVESTMENTS and URBAN OUTFITTERS
Can any of the company-specific risk be diversified away by investing in both SEI INVESTMENTS and URBAN OUTFITTERS 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 URBAN OUTFITTERS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SEI INVESTMENTS and URBAN OUTFITTERS, you can compare the effects of market volatilities on SEI INVESTMENTS and URBAN OUTFITTERS 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 URBAN OUTFITTERS. Check out your portfolio center. Please also check ongoing floating volatility patterns of SEI INVESTMENTS and URBAN OUTFITTERS.
Diversification Opportunities for SEI INVESTMENTS and URBAN OUTFITTERS
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between SEI and URBAN is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding SEI INVESTMENTS and URBAN OUTFITTERS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on URBAN OUTFITTERS 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 URBAN OUTFITTERS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of URBAN OUTFITTERS has no effect on the direction of SEI INVESTMENTS i.e., SEI INVESTMENTS and URBAN OUTFITTERS go up and down completely randomly.
Pair Corralation between SEI INVESTMENTS and URBAN OUTFITTERS
Assuming the 90 days trading horizon SEI INVESTMENTS is expected to generate 1.16 times less return on investment than URBAN OUTFITTERS. But when comparing it to its historical volatility, SEI INVESTMENTS is 2.24 times less risky than URBAN OUTFITTERS. It trades about 0.18 of its potential returns per unit of risk. URBAN OUTFITTERS is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 3,940 in URBAN OUTFITTERS on September 30, 2024 and sell it today you would earn a total of 1,360 from holding URBAN OUTFITTERS or generate 34.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SEI INVESTMENTS vs. URBAN OUTFITTERS
Performance |
| Timeline |
| SEI INVESTMENTS |
| URBAN OUTFITTERS |
SEI INVESTMENTS and URBAN OUTFITTERS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SEI INVESTMENTS and URBAN OUTFITTERS
The main advantage of trading using opposite SEI INVESTMENTS and URBAN OUTFITTERS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SEI INVESTMENTS position performs unexpectedly, URBAN OUTFITTERS 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 URBAN OUTFITTERS will offset losses from the drop in URBAN OUTFITTERS's long position.| SEI INVESTMENTS vs. LG Display Co | SEI INVESTMENTS vs. ANTA SPORTS PRODUCT | SEI INVESTMENTS vs. GALENA MINING LTD | SEI INVESTMENTS vs. Calibre Mining Corp |
| URBAN OUTFITTERS vs. Universal Insurance Holdings | URBAN OUTFITTERS vs. Singapore Reinsurance | URBAN OUTFITTERS vs. HANOVER INSURANCE | URBAN OUTFITTERS vs. LIFENET INSURANCE CO |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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