Correlation Between SEI INVESTMENTS and UNITED UTILITIES
Can any of the company-specific risk be diversified away by investing in both SEI INVESTMENTS and UNITED UTILITIES 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 UNITED UTILITIES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SEI INVESTMENTS and UNITED UTILITIES GR, you can compare the effects of market volatilities on SEI INVESTMENTS and UNITED UTILITIES 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 UNITED UTILITIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of SEI INVESTMENTS and UNITED UTILITIES.
Diversification Opportunities for SEI INVESTMENTS and UNITED UTILITIES
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SEI and UNITED is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding SEI INVESTMENTS and UNITED UTILITIES GR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNITED UTILITIES 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 UNITED UTILITIES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UNITED UTILITIES has no effect on the direction of SEI INVESTMENTS i.e., SEI INVESTMENTS and UNITED UTILITIES go up and down completely randomly.
Pair Corralation between SEI INVESTMENTS and UNITED UTILITIES
Assuming the 90 days trading horizon SEI INVESTMENTS is expected to generate 0.6 times more return on investment than UNITED UTILITIES. However, SEI INVESTMENTS is 1.65 times less risky than UNITED UTILITIES. It trades about 0.08 of its potential returns per unit of risk. UNITED UTILITIES GR is currently generating about 0.04 per unit of risk. If you would invest 5,624 in SEI INVESTMENTS on September 3, 2024 and sell it today you would earn a total of 2,176 from holding SEI INVESTMENTS or generate 38.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SEI INVESTMENTS vs. UNITED UTILITIES GR
Performance |
| Timeline |
| SEI INVESTMENTS |
| UNITED UTILITIES |
SEI INVESTMENTS and UNITED UTILITIES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SEI INVESTMENTS and UNITED UTILITIES
The main advantage of trading using opposite SEI INVESTMENTS and UNITED UTILITIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SEI INVESTMENTS position performs unexpectedly, UNITED UTILITIES 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 UNITED UTILITIES will offset losses from the drop in UNITED UTILITIES's long position.| SEI INVESTMENTS vs. TIANDE CHEMICAL | SEI INVESTMENTS vs. CHEMICAL INDUSTRIES | SEI INVESTMENTS vs. Grupo Carso SAB | SEI INVESTMENTS vs. GRUPO CARSO A1 |
| UNITED UTILITIES vs. ANTA SPORTS PRODUCT | UNITED UTILITIES vs. Transport International Holdings | UNITED UTILITIES vs. Sqs Software Quality | UNITED UTILITIES vs. PSI Software AG |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Stocks Directory Find actively traded stocks across global markets | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |