Correlation Between SEI INVESTMENTS and GFL ENVIRONM

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

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

Diversification Opportunities for SEI INVESTMENTS and GFL ENVIRONM

0.91

Correlation Coefficient

SEI INVESTMENTS  GFL ENVIRONM

Almost no diversification

The 3 months correlation between SEI and GFL is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding SEI INVESTMENTS and GFL ENVIRONM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GFL ENVIRONM 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 GFL ENVIRONM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GFL ENVIRONM has no effect on the direction of SEI INVESTMENTS i.e., SEI INVESTMENTS and GFL ENVIRONM go up and down completely randomly.

Pair Corralation between SEI INVESTMENTS and GFL ENVIRONM

Assuming the 90 days trading horizon SEI INVESTMENTS is expected to generate 0.74 times more return on investment than GFL ENVIRONM. However, SEI INVESTMENTS is 1.35 times less risky than GFL ENVIRONM. It trades about 0.3 of its potential returns per unit of risk. GFL ENVIRONM is currently generating about 0.12 per unit of risk. If you would invest  6,100  in SEI INVESTMENTS on September 3, 2024 and sell it today you would earn a total of  1,700  from holding SEI INVESTMENTS or generate 27.87% return on investment over 90 days.

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

SEI INVESTMENTS  vs.  GFL ENVIRONM

SEI INVESTMENTS

Risk-Adjusted Performance

23 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in SEI INVESTMENTS are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, SEI INVESTMENTS unveiled solid returns over the last few months and may actually be approaching a breakup point.

GFL ENVIRONM

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in GFL ENVIRONM are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, GFL ENVIRONM reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SEI INVESTMENTS and GFL ENVIRONM

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

The idea behind SEI INVESTMENTS and GFL ENVIRONM 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..