Correlation Between SEI INVESTMENTS and American Airlines

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

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

Diversification Opportunities for SEI INVESTMENTS and American Airlines

0.81

Correlation Coefficient

SEI INVESTMENTS  American Airlines

Very poor diversification

The 3 months correlation between SEI and American is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding SEI INVESTMENTS and American Airlines Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Airlines 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 American Airlines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Airlines has no effect on the direction of SEI INVESTMENTS i.e., SEI INVESTMENTS and American Airlines go up and down completely randomly.

Pair Corralation between SEI INVESTMENTS and American Airlines

Assuming the 90 days trading horizon SEI INVESTMENTS is expected to generate 1.64 times less return on investment than American Airlines. But when comparing it to its historical volatility, SEI INVESTMENTS is 3.13 times less risky than American Airlines. It trades about 0.2 of its potential returns per unit of risk. American Airlines Group is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  866.00  in American Airlines Group on April 25, 2025 and sell it today you would earn a total of  180.00  from holding American Airlines Group or generate 20.79% return on investment over 90 days.

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

SEI INVESTMENTS  vs.  American Airlines Group

SEI INVESTMENTS

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SEI INVESTMENTS are ranked lower than 15 (%) 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.

American Airlines

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in American Airlines Group are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, American Airlines reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SEI INVESTMENTS and American Airlines

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

The idea behind SEI INVESTMENTS and American Airlines Group 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.

Check out your portfolio center.

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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.