Correlation Between SEI INVESTMENTS and Walmart

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

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

Diversification Opportunities for SEI INVESTMENTS and Walmart

0.95

Correlation Coefficient

SEI INVESTMENTS  Walmart

Almost no diversification

The 3 months correlation between SEI and Walmart is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding SEI INVESTMENTS and Walmart in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walmart 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 Walmart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Walmart has no effect on the direction of SEI INVESTMENTS i.e., SEI INVESTMENTS and Walmart go up and down completely randomly.

Pair Corralation between SEI INVESTMENTS and Walmart

Assuming the 90 days trading horizon SEI INVESTMENTS is expected to generate 1.07 times more return on investment than Walmart. However, SEI INVESTMENTS is 1.07 times more volatile than Walmart. It trades about 0.06 of its potential returns per unit of risk. Walmart is currently generating about -0.04 per unit of risk. If you would invest  7,852  in SEI INVESTMENTS on October 9, 2024 and sell it today you would earn a total of  98.00  from holding SEI INVESTMENTS or generate 1.25% 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.  Walmart

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 fragile basic indicators, SEI INVESTMENTS unveiled solid returns over the last few months and may actually be approaching a breakup point.

Walmart

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Walmart are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Walmart unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SEI INVESTMENTS and Walmart

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

The idea behind SEI INVESTMENTS and Walmart 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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.