Correlation Between Chiba Bank and SEI Investments

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

By analyzing existing cross correlation between Chiba Bank Ltd and SEI Investments, you can compare the effects of market volatilities on Chiba Bank and SEI Investments 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 Chiba Bank with a short position of SEI Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chiba Bank and SEI Investments.

Diversification Opportunities for Chiba Bank and SEI Investments

0.84

Correlation Coefficient

Chiba Bank  SEI Investments

Very poor diversification

The 3 months correlation between Chiba and SEI is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Chiba Bank Ltd and SEI Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEI Investments and Chiba Bank 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 Chiba Bank Ltd are associated (or correlated) with SEI Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEI Investments has no effect on the direction of Chiba Bank i.e., Chiba Bank and SEI Investments go up and down completely randomly.

Pair Corralation between Chiba Bank and SEI Investments

Assuming the 90 days horizon Chiba Bank Ltd is expected to generate 1.04 times more return on investment than SEI Investments. However, Chiba Bank is 1.04 times more volatile than SEI Investments. It trades about 0.16 of its potential returns per unit of risk. SEI Investments is currently generating about 0.13 per unit of risk. If you would invest  4,270  in Chiba Bank Ltd on May 6, 2025 and sell it today you would earn a total of  495.00  from holding Chiba Bank Ltd or generate 11.59% return on investment over 90 days.

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

Chiba Bank Ltd  vs.  SEI Investments

Chiba Bank

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Chiba Bank Ltd are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Chiba Bank may actually be approaching a critical reversion point that can send shares even higher in September 2025.

SEI Investments

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SEI Investments are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent forward indicators, SEI Investments may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Chiba Bank and SEI Investments

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

The idea behind Chiba Bank Ltd and SEI Investments 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.