Correlation Between SEI Investments and Gauzy

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

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

Diversification Opportunities for SEI Investments and Gauzy

-0.29

Correlation Coefficient

SEI Investments  Gauzy

Very good diversification

The 3 months correlation between SEI and Gauzy is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding SEI Investments and Gauzy Ltd Ordinary in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gauzy Ordinary 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 Gauzy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gauzy Ordinary has no effect on the direction of SEI Investments i.e., SEI Investments and Gauzy go up and down completely randomly.

Pair Corralation between SEI Investments and Gauzy

Given the investment horizon of 90 days SEI Investments is expected to generate 0.19 times more return on investment than Gauzy. However, SEI Investments is 5.26 times less risky than Gauzy. It trades about 0.06 of its potential returns per unit of risk. Gauzy Ltd Ordinary is currently generating about -0.03 per unit of risk. If you would invest  6,040  in SEI Investments on October 11, 2024 and sell it today you would earn a total of  2,108  from holding SEI Investments or generate 34.9% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	30.3%
Values	Daily Returns

SEI Investments  vs.  Gauzy Ltd Ordinary

SEI Investments

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SEI Investments are ranked lower than 15 (%) 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.

Gauzy Ordinary

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Gauzy Ltd Ordinary are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Gauzy showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SEI Investments and Gauzy

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

The idea behind SEI Investments and Gauzy Ltd Ordinary 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.