Correlation Between SEI Exchange and Global X

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

By analyzing existing cross correlation between SEI Exchange Traded and Global X SuperDividend, you can compare the effects of market volatilities on SEI Exchange and Global X 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 Exchange with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of SEI Exchange and Global X.

Diversification Opportunities for SEI Exchange and Global X

-0.24

Correlation Coefficient

SEI Exchange  Global X

Very good diversification

The 3 months correlation between SEI and Global is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding SEI Exchange Traded and Global X SuperDividend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X SuperDividend and SEI Exchange 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 Exchange Traded are associated (or correlated) with Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X SuperDividend has no effect on the direction of SEI Exchange i.e., SEI Exchange and Global X go up and down completely randomly.

Pair Corralation between SEI Exchange and Global X

Given the investment horizon of 90 days SEI Exchange Traded is expected to generate 0.58 times more return on investment than Global X. However, SEI Exchange Traded is 1.71 times less risky than Global X. It trades about 0.1 of its potential returns per unit of risk. Global X SuperDividend is currently generating about 0.04 per unit of risk. If you would invest  2,523  in SEI Exchange Traded on October 5, 2024 and sell it today you would earn a total of  379.00  from holding SEI Exchange Traded or generate 15.02% return on investment over 90 days.

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

SEI Exchange Traded  vs.  Global X SuperDividend

SEI Exchange Traded

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SEI Exchange Traded has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable essential indicators, SEI Exchange is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Global X SuperDividend

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Global X SuperDividend has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Etf's forward indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the fund sophisticated investors.

Pair Trading with SEI Exchange and Global X

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

The idea behind SEI Exchange Traded and Global X SuperDividend 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.