Correlation Between SEI Investments and Ampleforth

Can any of the company-specific risk be diversified away by investing in both SEI Investments and Ampleforth 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 Ampleforth into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SEI Investments and Ampleforth, you can compare the effects of market volatilities on SEI Investments and Ampleforth 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 Ampleforth. Check out your portfolio center. Please also check ongoing floating volatility patterns of SEI Investments and Ampleforth.

Diversification Opportunities for SEI Investments and Ampleforth

-0.25

Correlation Coefficient

SEI Investments  Ampleforth

Very good diversification

The 3 months correlation between SEI and Ampleforth is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding SEI Investments and Ampleforth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ampleforth 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 Ampleforth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ampleforth has no effect on the direction of SEI Investments i.e., SEI Investments and Ampleforth go up and down completely randomly.

Pair Corralation between SEI Investments and Ampleforth

Given the investment horizon of 90 days SEI Investments is expected to generate 0.13 times more return on investment than Ampleforth. However, SEI Investments is 7.42 times less risky than Ampleforth. It trades about -0.12 of its potential returns per unit of risk. Ampleforth is currently generating about -0.14 per unit of risk. If you would invest  7,033  in SEI Investments on March 21, 2024 and sell it today you would lose (457.00) from holding SEI Investments or give up 6.5% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	34.92%
Values	Daily Returns

SEI Investments  vs.  Ampleforth

SEI Investments

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SEI Investments has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's forward indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Ampleforth

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ampleforth has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Crypto's basic indicators remain rather sound which may send shares a bit higher in July 2024. The latest tumult may also be a sign of longer-term up-swing for Ampleforth shareholders.

Pair Trading with SEI Investments and Ampleforth

The main advantage of trading using opposite SEI Investments and Ampleforth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SEI Investments position performs unexpectedly, Ampleforth 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 Ampleforth will offset losses from the drop in Ampleforth's long position.

The idea behind SEI Investments and Ampleforth pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.