Correlation Between Seix Us and Mh Elite

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

By analyzing existing cross correlation between Seix Govt Sec and Mh Elite Select, you can compare the effects of market volatilities on Seix Us and Mh Elite 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 Seix Us with a short position of Mh Elite. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seix Us and Mh Elite.

Diversification Opportunities for Seix Us and Mh Elite

-0.29

Correlation Coefficient

Seix Us  Mh Elite

Very good diversification

The 3 months correlation between Seix and MHESX is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Seix Govt Sec and Mh Elite Select in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mh Elite Select and Seix Us 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 Seix Govt Sec are associated (or correlated) with Mh Elite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mh Elite Select has no effect on the direction of Seix Us i.e., Seix Us and Mh Elite go up and down completely randomly.

Pair Corralation between Seix Us and Mh Elite

Assuming the 90 days horizon Seix Govt Sec is expected to generate 0.09 times more return on investment than Mh Elite. However, Seix Govt Sec is 11.34 times less risky than Mh Elite. It trades about 0.23 of its potential returns per unit of risk. Mh Elite Select is currently generating about 0.01 per unit of risk. If you would invest  977.00  in Seix Govt Sec on December 19, 2024 and sell it today you would earn a total of  15.00  from holding Seix Govt Sec or generate 1.54% return on investment over 90 days.

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

Seix Govt Sec  vs.  Mh Elite Select

Seix Govt Sec

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Seix Govt Sec are ranked lower than 18 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Seix Us is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Mh Elite Select

Risk-Adjusted Performance

Very Weak

Over the last 90 days Mh Elite Select has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Mh Elite is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Seix Us and Mh Elite

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

The idea behind Seix Govt Sec and Mh Elite Select 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.