Correlation Between SEI Investments and Blackrock Funds

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

By analyzing existing cross correlation between SEI Investments and Blackrock Funds Iii, you can compare the effects of market volatilities on SEI Investments and Blackrock Funds 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 Blackrock Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of SEI Investments and Blackrock Funds.

Diversification Opportunities for SEI Investments and Blackrock Funds

0.89

Correlation Coefficient

SEI Investments  Blackrock Funds

Very poor diversification

The 3 months correlation between SEI and Blackrock is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding SEI Investments and Blackrock Funds Iii in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Funds Iii 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 Blackrock Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Funds Iii has no effect on the direction of SEI Investments i.e., SEI Investments and Blackrock Funds go up and down completely randomly.

Pair Corralation between SEI Investments and Blackrock Funds

Given the investment horizon of 90 days SEI Investments is expected to generate 11.08 times more return on investment than Blackrock Funds. However, SEI Investments is 11.08 times more volatile than Blackrock Funds Iii. It trades about 0.2 of its potential returns per unit of risk. Blackrock Funds Iii is currently generating about 0.13 per unit of risk. If you would invest  6,928  in SEI Investments on October 6, 2024 and sell it today you would earn a total of  1,262  from holding SEI Investments or generate 18.22% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	96.88%
Values	Daily Returns

SEI Investments  vs.  Blackrock Funds Iii

SEI Investments

Risk-Adjusted Performance

15 of 100

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 rather inconsistent forward indicators, SEI Investments exhibited solid returns over the last few months and may actually be approaching a breakup point.

Blackrock Funds Iii

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Blackrock Funds Iii are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Blackrock Funds is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with SEI Investments and Blackrock Funds

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

The idea behind SEI Investments and Blackrock Funds Iii 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.