Correlation Between Sitka Gold and SEI Investments
Can any of the company-specific risk be diversified away by investing in both Sitka Gold and SEI Investments 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 Sitka Gold and SEI Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sitka Gold Corp and SEI Investments, you can compare the effects of market volatilities on Sitka Gold and SEI Investments 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 Sitka Gold with a short position of SEI Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sitka Gold and SEI Investments.
Diversification Opportunities for Sitka Gold and SEI Investments
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sitka and SEI is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Sitka Gold Corp and SEI Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEI Investments and Sitka Gold 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 Sitka Gold Corp are associated (or correlated) with SEI Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEI Investments has no effect on the direction of Sitka Gold i.e., Sitka Gold and SEI Investments go up and down completely randomly.
Pair Corralation between Sitka Gold and SEI Investments
Assuming the 90 days horizon Sitka Gold Corp is expected to under-perform the SEI Investments. In addition to that, Sitka Gold is 4.59 times more volatile than SEI Investments. It trades about -0.12 of its total potential returns per unit of risk. SEI Investments is currently generating about 0.28 per unit of volatility. If you would invest 7,620 in SEI Investments on August 30, 2024 and sell it today you would earn a total of 624.00 from holding SEI Investments or generate 8.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sitka Gold Corp vs. SEI Investments
Performance |
| Timeline |
| Sitka Gold Corp |
| SEI Investments |
Sitka Gold and SEI Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sitka Gold and SEI Investments
The main advantage of trading using opposite Sitka Gold and SEI Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sitka Gold position performs unexpectedly, SEI Investments 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 SEI Investments will offset losses from the drop in SEI Investments' long position.| Sitka Gold vs. Aurion Resources | Sitka Gold vs. Minera Alamos | Sitka Gold vs. Rio2 Limited | Sitka Gold vs. Roscan Gold Corp |
| SEI Investments vs. Commerce Bancshares | SEI Investments vs. RLI Corp | SEI Investments vs. Westamerica Bancorporation | SEI Investments vs. Brown Brown |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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