Correlation Between SEI INVESTMENTS and BANK RAKYAT

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

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

Diversification Opportunities for SEI INVESTMENTS and BANK RAKYAT

-0.86

Correlation Coefficient

SEI INVESTMENTS  BANK RAKYAT

Pay attention - limited upside

The 3 months correlation between SEI and BANK is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding SEI INVESTMENTS and BANK RAKYAT IND in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BANK RAKYAT IND 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 BANK RAKYAT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BANK RAKYAT IND has no effect on the direction of SEI INVESTMENTS i.e., SEI INVESTMENTS and BANK RAKYAT go up and down completely randomly.

Pair Corralation between SEI INVESTMENTS and BANK RAKYAT

Assuming the 90 days trading horizon SEI INVESTMENTS is expected to generate 2.03 times less return on investment than BANK RAKYAT. In addition to that, SEI INVESTMENTS is 1.5 times more volatile than BANK RAKYAT IND. It trades about 0.08 of its total potential returns per unit of risk. BANK RAKYAT IND is currently generating about 0.25 per unit of volatility. If you would invest  24.00  in BANK RAKYAT IND on October 8, 2024 and sell it today you would earn a total of  1.00  from holding BANK RAKYAT IND or generate 4.17% return on investment over 90 days.

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

SEI INVESTMENTS  vs.  BANK RAKYAT IND

SEI INVESTMENTS

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in SEI INVESTMENTS are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, SEI INVESTMENTS unveiled solid returns over the last few months and may actually be approaching a breakup point.

BANK RAKYAT IND

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BANK RAKYAT IND has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain 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 BANK RAKYAT

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

The idea behind SEI INVESTMENTS and BANK RAKYAT IND 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.