Correlation Between Xp and SEI Investments
Can any of the company-specific risk be diversified away by investing in both Xp 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 Xp and SEI Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xp Inc and SEI Investments, you can compare the effects of market volatilities on Xp 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 Xp with a short position of SEI Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xp and SEI Investments.
Diversification Opportunities for Xp and SEI Investments
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Xp and SEI is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Xp Inc and SEI Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEI Investments and Xp 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 Xp Inc 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 Xp i.e., Xp and SEI Investments go up and down completely randomly.
Pair Corralation between Xp and SEI Investments
Allowing for the 90-day total investment horizon Xp Inc is expected to under-perform the SEI Investments. In addition to that, Xp is 1.96 times more volatile than SEI Investments. It trades about -0.18 of its total potential returns per unit of risk. SEI Investments is currently generating about 0.27 per unit of volatility. If you would invest 7,510 in SEI Investments on August 26, 2024 and sell it today you would earn a total of 572.00 from holding SEI Investments or generate 7.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xp Inc vs. SEI Investments
Performance |
| Timeline |
| Xp Inc |
| SEI Investments |
Xp and SEI Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xp and SEI Investments
The main advantage of trading using opposite Xp and SEI Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xp 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.| Xp vs. Up Fintech Holding | Xp vs. Bit Digital | Xp vs. Marathon Digital Holdings | Xp vs. MarketAxess Holdings |
| SEI Investments vs. PowerUp Acquisition Corp | SEI Investments vs. Aurora Innovation | SEI Investments vs. HUMANA INC | SEI Investments vs. Aquagold International |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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