Correlation Between SEI INVESTMENTS and MBANK (BRUSG)

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

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

Diversification Opportunities for SEI INVESTMENTS and MBANK (BRUSG)

-0.77

Correlation Coefficient

SEI INVESTMENTS  MBANK (BRUSG)

Pay attention - limited upside

The 3 months correlation between SEI and MBANK is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding SEI INVESTMENTS and MBANK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MBANK (BRUSG) 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 MBANK (BRUSG). Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MBANK (BRUSG) has no effect on the direction of SEI INVESTMENTS i.e., SEI INVESTMENTS and MBANK (BRUSG) go up and down completely randomly.

Pair Corralation between SEI INVESTMENTS and MBANK (BRUSG)

Assuming the 90 days trading horizon SEI INVESTMENTS is expected to generate 1.95 times less return on investment than MBANK (BRUSG). But when comparing it to its historical volatility, SEI INVESTMENTS is 2.94 times less risky than MBANK (BRUSG). It trades about 0.09 of its potential returns per unit of risk. MBANK is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  6,845  in MBANK on October 10, 2024 and sell it today you would earn a total of  5,440  from holding MBANK or generate 79.47% return on investment over 90 days.

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

SEI INVESTMENTS  vs.  MBANK

SEI INVESTMENTS

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in SEI INVESTMENTS are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, SEI INVESTMENTS unveiled solid returns over the last few months and may actually be approaching a breakup point.

MBANK (BRUSG)

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MBANK has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with SEI INVESTMENTS and MBANK (BRUSG)

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

The idea behind SEI INVESTMENTS and MBANK 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.