Correlation Between SEI Investments and Dana

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

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

Diversification Opportunities for SEI Investments and Dana

0.09

Correlation Coefficient

SEI Investments  Dana

Significant diversification

The 3 months correlation between SEI and Dana is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding SEI Investments and Dana Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dana Inc 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 Dana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dana Inc has no effect on the direction of SEI Investments i.e., SEI Investments and Dana go up and down completely randomly.

Pair Corralation between SEI Investments and Dana

Given the investment horizon of 90 days SEI Investments is expected to generate 1.26 times less return on investment than Dana. But when comparing it to its historical volatility, SEI Investments is 3.53 times less risky than Dana. It trades about 0.32 of its potential returns per unit of risk. Dana Inc is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  985.00  in Dana Inc on September 16, 2024 and sell it today you would earn a total of  283.00  from holding Dana Inc or generate 28.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

SEI Investments  vs.  Dana Inc

SEI Investments

Risk-Adjusted Performance

25 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in SEI Investments are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. In spite of rather abnormal forward indicators, SEI Investments exhibited solid returns over the last few months and may actually be approaching a breakup point.

Dana Inc

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Dana Inc are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile basic indicators, Dana displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SEI Investments and Dana

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

The idea behind SEI Investments and Dana Inc 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.

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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..