Correlation Between 6 Meridian and SEI Exchange
Can any of the company-specific risk be diversified away by investing in both 6 Meridian and SEI Exchange 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 6 Meridian and SEI Exchange into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 6 Meridian Mega and SEI Exchange Traded, you can compare the effects of market volatilities on 6 Meridian and SEI Exchange 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 6 Meridian with a short position of SEI Exchange. Check out your portfolio center. Please also check ongoing floating volatility patterns of 6 Meridian and SEI Exchange.
Diversification Opportunities for 6 Meridian and SEI Exchange
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between SIXA and SEI is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding 6 Meridian Mega and SEI Exchange Traded in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEI Exchange Traded and 6 Meridian 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 6 Meridian Mega are associated (or correlated) with SEI Exchange. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEI Exchange Traded has no effect on the direction of 6 Meridian i.e., 6 Meridian and SEI Exchange go up and down completely randomly.
Pair Corralation between 6 Meridian and SEI Exchange
Given the investment horizon of 90 days 6 Meridian is expected to generate 1.03 times less return on investment than SEI Exchange. But when comparing it to its historical volatility, 6 Meridian Mega is 1.13 times less risky than SEI Exchange. It trades about 0.26 of its potential returns per unit of risk. SEI Exchange Traded is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 2,992 in SEI Exchange Traded on November 28, 2024 and sell it today you would earn a total of 71.00 from holding SEI Exchange Traded or generate 2.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
6 Meridian Mega vs. SEI Exchange Traded
Performance |
| Timeline |
| 6 Meridian Mega |
| SEI Exchange Traded |
6 Meridian and SEI Exchange Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 6 Meridian and SEI Exchange
The main advantage of trading using opposite 6 Meridian and SEI Exchange positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 6 Meridian position performs unexpectedly, SEI Exchange 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 Exchange will offset losses from the drop in SEI Exchange's long position.| 6 Meridian vs. 6 Meridian Low | 6 Meridian vs. ETC 6 Meridian | 6 Meridian vs. 6 Meridian Small | 6 Meridian vs. Day HaganNed Davis |
| SEI Exchange vs. SEI Exchange Traded | SEI Exchange vs. SEI Exchange Traded | SEI Exchange vs. SEI Exchange Traded | SEI Exchange vs. Listed Funds Trust |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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