Correlation Between Listed Funds and SEI Select

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

By analyzing existing cross correlation between Listed Funds Trust and SEI Select Emerging, you can compare the effects of market volatilities on Listed Funds and SEI Select 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 Listed Funds with a short position of SEI Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Listed Funds and SEI Select.

Diversification Opportunities for Listed Funds and SEI Select

0.13

Correlation Coefficient

Listed Funds  SEI Select

Average diversification

The 3 months correlation between Listed and SEI is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Listed Funds Trust and SEI Select Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEI Select Emerging and Listed Funds 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 Listed Funds Trust are associated (or correlated) with SEI Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEI Select Emerging has no effect on the direction of Listed Funds i.e., Listed Funds and SEI Select go up and down completely randomly.

Pair Corralation between Listed Funds and SEI Select

Given the investment horizon of 90 days Listed Funds Trust is expected to generate 0.96 times more return on investment than SEI Select. However, Listed Funds Trust is 1.04 times less risky than SEI Select. It trades about -0.2 of its potential returns per unit of risk. SEI Select Emerging is currently generating about -0.2 per unit of risk. If you would invest  3,308  in Listed Funds Trust on October 11, 2024 and sell it today you would lose (96.00) from holding Listed Funds Trust or give up 2.9% of portfolio value over 90 days.

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

Listed Funds Trust  vs.  SEI Select Emerging

Listed Funds Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Listed Funds Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Listed Funds is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

SEI Select Emerging

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SEI Select Emerging has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Etf's technical and fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the ETF investors.

Pair Trading with Listed Funds and SEI Select

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

The idea behind Listed Funds Trust and SEI Select Emerging 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.