Correlation Between SEI Investments and Carlyle Secured

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

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

Diversification Opportunities for SEI Investments and Carlyle Secured

-0.01

Correlation Coefficient

SEI Investments  Carlyle Secured

Good diversification

The 3 months correlation between SEI and Carlyle is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding SEI Investments and Carlyle Secured Lending in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carlyle Secured Lending 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 Carlyle Secured. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carlyle Secured Lending has no effect on the direction of SEI Investments i.e., SEI Investments and Carlyle Secured go up and down completely randomly.

Pair Corralation between SEI Investments and Carlyle Secured

Given the investment horizon of 90 days SEI Investments is expected to generate 1.17 times more return on investment than Carlyle Secured. However, SEI Investments is 1.17 times more volatile than Carlyle Secured Lending. It trades about 0.28 of its potential returns per unit of risk. Carlyle Secured Lending is currently generating about 0.07 per unit of risk. If you would invest  6,727  in SEI Investments on September 3, 2024 and sell it today you would earn a total of  1,536  from holding SEI Investments or generate 22.83% return on investment over 90 days.

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

SEI Investments  vs.  Carlyle Secured Lending

SEI Investments

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in SEI Investments are ranked lower than 21 (%) 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.

Carlyle Secured Lending

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Carlyle Secured Lending are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental drivers, Carlyle Secured is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with SEI Investments and Carlyle Secured

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

The idea behind SEI Investments and Carlyle Secured Lending 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.