Correlation Between SEI INVESTMENTS and Canadian Tire
Can any of the company-specific risk be diversified away by investing in both SEI INVESTMENTS and Canadian Tire 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 Canadian Tire into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SEI INVESTMENTS and Canadian Tire Corp, you can compare the effects of market volatilities on SEI INVESTMENTS and Canadian Tire 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 Canadian Tire. Check out your portfolio center. Please also check ongoing floating volatility patterns of SEI INVESTMENTS and Canadian Tire.
Diversification Opportunities for SEI INVESTMENTS and Canadian Tire
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between SEI and Canadian is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding SEI INVESTMENTS and Canadian Tire Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canadian Tire Corp 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 Canadian Tire. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canadian Tire Corp has no effect on the direction of SEI INVESTMENTS i.e., SEI INVESTMENTS and Canadian Tire go up and down completely randomly.
Pair Corralation between SEI INVESTMENTS and Canadian Tire
Assuming the 90 days trading horizon SEI INVESTMENTS is expected to generate 0.76 times more return on investment than Canadian Tire. However, SEI INVESTMENTS is 1.31 times less risky than Canadian Tire. It trades about 0.15 of its potential returns per unit of risk. Canadian Tire Corp is currently generating about 0.05 per unit of risk. If you would invest 5,662 in SEI INVESTMENTS on September 14, 2024 and sell it today you would earn a total of 2,538 from holding SEI INVESTMENTS or generate 44.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
SEI INVESTMENTS vs. Canadian Tire Corp
Performance |
| Timeline |
| SEI INVESTMENTS |
| Canadian Tire Corp |
SEI INVESTMENTS and Canadian Tire Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SEI INVESTMENTS and Canadian Tire
The main advantage of trading using opposite SEI INVESTMENTS and Canadian Tire positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SEI INVESTMENTS position performs unexpectedly, Canadian Tire 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 Canadian Tire will offset losses from the drop in Canadian Tire's long position.| SEI INVESTMENTS vs. Apple Inc | SEI INVESTMENTS vs. Apple Inc | SEI INVESTMENTS vs. Apple Inc | SEI INVESTMENTS vs. Apple Inc |
| Canadian Tire vs. JLF INVESTMENT | Canadian Tire vs. PennantPark Investment | Canadian Tire vs. PKSHA TECHNOLOGY INC | Canadian Tire vs. EAT WELL INVESTMENT |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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