Correlation Between Chia and Sei Institutional

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

By analyzing existing cross correlation between Chia and Sei Institutional Managed, you can compare the effects of market volatilities on Chia and Sei Institutional 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 Chia with a short position of Sei Institutional. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chia and Sei Institutional.

Diversification Opportunities for Chia and Sei Institutional

0.2

Correlation Coefficient

Chia  Sei Institutional

Modest diversification

The 3 months correlation between Chia and Sei is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Chia and Sei Institutional Managed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sei Institutional Managed and Chia 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 Chia are associated (or correlated) with Sei Institutional. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sei Institutional Managed has no effect on the direction of Chia i.e., Chia and Sei Institutional go up and down completely randomly.

Pair Corralation between Chia and Sei Institutional

Assuming the 90 days trading horizon Chia is expected to generate 5.09 times more return on investment than Sei Institutional. However, Chia is 5.09 times more volatile than Sei Institutional Managed. It trades about -0.02 of its potential returns per unit of risk. Sei Institutional Managed is currently generating about -0.3 per unit of risk. If you would invest  2,498  in Chia on October 9, 2024 and sell it today you would lose (104.00) from holding Chia or give up 4.16% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	90.48%
Values	Daily Returns

Chia  vs.  Sei Institutional Managed

Chia

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Chia are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical indicators, Chia exhibited solid returns over the last few months and may actually be approaching a breakup point.

Sei Institutional Managed

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Chia and Sei Institutional

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

The idea behind Chia and Sei Institutional Managed 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.