Correlation Between SEI INVESTMENTS and ELMOS SEMICONDUCTOR

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Can any of the company-specific risk be diversified away by investing in both SEI INVESTMENTS and ELMOS SEMICONDUCTOR 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 ELMOS SEMICONDUCTOR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SEI INVESTMENTS and ELMOS SEMICONDUCTOR, you can compare the effects of market volatilities on SEI INVESTMENTS and ELMOS SEMICONDUCTOR 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 ELMOS SEMICONDUCTOR. Check out your portfolio center. Please also check ongoing floating volatility patterns of SEI INVESTMENTS and ELMOS SEMICONDUCTOR.

Diversification Opportunities for SEI INVESTMENTS and ELMOS SEMICONDUCTOR

SEIELMOSDiversified AwaySEIELMOSDiversified Away100%
0.11
  Correlation Coefficient

Average diversification

The 3 months correlation between SEI and ELMOS is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding SEI INVESTMENTS and ELMOS SEMICONDUCTOR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ELMOS SEMICONDUCTOR 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 ELMOS SEMICONDUCTOR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ELMOS SEMICONDUCTOR has no effect on the direction of SEI INVESTMENTS i.e., SEI INVESTMENTS and ELMOS SEMICONDUCTOR go up and down completely randomly.

Pair Corralation between SEI INVESTMENTS and ELMOS SEMICONDUCTOR

Assuming the 90 days trading horizon SEI INVESTMENTS is expected to generate 0.47 times more return on investment than ELMOS SEMICONDUCTOR. However, SEI INVESTMENTS is 2.14 times less risky than ELMOS SEMICONDUCTOR. It trades about 0.31 of its potential returns per unit of risk. ELMOS SEMICONDUCTOR is currently generating about 0.0 per unit of risk. If you would invest  6,113  in SEI INVESTMENTS on September 29, 2024 and sell it today you would earn a total of  1,937  from holding SEI INVESTMENTS or generate 31.69% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

SEI INVESTMENTS  vs.  ELMOS SEMICONDUCTOR

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec -100102030
JavaScript chart by amCharts 3.21.15SI3 ELG
       Timeline  
SEI INVESTMENTS 

Risk-Adjusted Performance

24 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in SEI INVESTMENTS are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, SEI INVESTMENTS unveiled solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec65707580
ELMOS SEMICONDUCTOR 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Weak
Over the last 90 days ELMOS SEMICONDUCTOR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, ELMOS SEMICONDUCTOR is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec545658606264666870

SEI INVESTMENTS and ELMOS SEMICONDUCTOR Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-4.27-3.2-2.13-1.050.01.22.453.694.946.18 0.050.100.15
JavaScript chart by amCharts 3.21.15SI3 ELG
       Returns  

Pair Trading with SEI INVESTMENTS and ELMOS SEMICONDUCTOR

The main advantage of trading using opposite SEI INVESTMENTS and ELMOS SEMICONDUCTOR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SEI INVESTMENTS position performs unexpectedly, ELMOS SEMICONDUCTOR 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 ELMOS SEMICONDUCTOR will offset losses from the drop in ELMOS SEMICONDUCTOR's long position.
The idea behind SEI INVESTMENTS and ELMOS SEMICONDUCTOR 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.

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