Correlation Between Enbridge and Sei Instit

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

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

Diversification Opportunities for Enbridge and Sei Instit

0.64

Correlation Coefficient

Enbridge  Sei Instit

Poor diversification

The 3 months correlation between Enbridge and Sei is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Enbridge and Sei Instit International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sei Instit International and Enbridge 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 Enbridge are associated (or correlated) with Sei Instit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sei Instit International has no effect on the direction of Enbridge i.e., Enbridge and Sei Instit go up and down completely randomly.

Pair Corralation between Enbridge and Sei Instit

Considering the 90-day investment horizon Enbridge is expected to generate 1.69 times less return on investment than Sei Instit. In addition to that, Enbridge is 1.91 times more volatile than Sei Instit International. It trades about 0.13 of its total potential returns per unit of risk. Sei Instit International is currently generating about 0.41 per unit of volatility. If you would invest  1,269  in Sei Instit International on March 6, 2025 and sell it today you would earn a total of  62.00  from holding Sei Instit International or generate 4.89% return on investment over 90 days.

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

Enbridge  vs.  Sei Instit International

Enbridge

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Enbridge are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Enbridge sustained solid returns over the last few months and may actually be approaching a breakup point.

Sei Instit International

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Sei Instit International are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Sei Instit may actually be approaching a critical reversion point that can send shares even higher in July 2025.

Pair Trading with Enbridge and Sei Instit

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

The idea behind Enbridge and Sei Instit International 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 Anywhere module to track or share privately all of your investments from the convenience of any device.