Correlation Between SEI Investments and Agnico Eagle

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

Diversification Opportunities for SEI Investments and Agnico Eagle

0.04
  Correlation Coefficient

Significant diversification

The 3 months correlation between SEI and Agnico is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding SEI Investments and Agnico Eagle Mines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agnico Eagle Mines 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 Agnico Eagle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agnico Eagle Mines has no effect on the direction of SEI Investments i.e., SEI Investments and Agnico Eagle go up and down completely randomly.

Pair Corralation between SEI Investments and Agnico Eagle

Given the investment horizon of 90 days SEI Investments is expected to generate 0.74 times more return on investment than Agnico Eagle. However, SEI Investments is 1.35 times less risky than Agnico Eagle. It trades about 0.08 of its potential returns per unit of risk. Agnico Eagle Mines is currently generating about -0.14 per unit of risk. If you would invest  8,244  in SEI Investments on September 27, 2024 and sell it today you would earn a total of  184.00  from holding SEI Investments or generate 2.23% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

SEI Investments  vs.  Agnico Eagle Mines

 Performance 
       Timeline  
SEI Investments 

Risk-Adjusted Performance

18 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in SEI Investments are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent forward indicators, SEI Investments exhibited solid returns over the last few months and may actually be approaching a breakup point.
Agnico Eagle Mines 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Agnico Eagle Mines has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, Agnico Eagle is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

SEI Investments and Agnico Eagle Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with SEI Investments and Agnico Eagle

The main advantage of trading using opposite SEI Investments and Agnico Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SEI Investments position performs unexpectedly, Agnico Eagle 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 Agnico Eagle will offset losses from the drop in Agnico Eagle's long position.
The idea behind SEI Investments and Agnico Eagle Mines 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.

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