Correlation Between SEI Investments and Franklin Credit
Can any of the company-specific risk be diversified away by investing in both SEI Investments and Franklin Credit 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 Franklin Credit into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SEI Investments and Franklin Credit Management, you can compare the effects of market volatilities on SEI Investments and Franklin Credit 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 Franklin Credit. Check out your portfolio center. Please also check ongoing floating volatility patterns of SEI Investments and Franklin Credit.
Diversification Opportunities for SEI Investments and Franklin Credit
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SEI and Franklin is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding SEI Investments and Franklin Credit Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Credit Mana 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 Franklin Credit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Credit Mana has no effect on the direction of SEI Investments i.e., SEI Investments and Franklin Credit go up and down completely randomly.
Pair Corralation between SEI Investments and Franklin Credit
Given the investment horizon of 90 days SEI Investments is expected to generate 6.54 times less return on investment than Franklin Credit. But when comparing it to its historical volatility, SEI Investments is 11.27 times less risky than Franklin Credit. It trades about 0.07 of its potential returns per unit of risk. Franklin Credit Management is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 25.00 in Franklin Credit Management on December 5, 2024 and sell it today you would lose (15.00) from holding Franklin Credit Management or give up 60.0% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 99.8% |
Values | Daily Returns |
SEI Investments vs. Franklin Credit Management
Performance |
Timeline |
SEI Investments |
Franklin Credit Mana |
SEI Investments and Franklin Credit Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with SEI Investments and Franklin Credit
The main advantage of trading using opposite SEI Investments and Franklin Credit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SEI Investments position performs unexpectedly, Franklin Credit 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 Franklin Credit will offset losses from the drop in Franklin Credit's long position.SEI Investments vs. Commerce Bancshares | SEI Investments vs. RLI Corp | SEI Investments vs. Westamerica Bancorporation | SEI Investments vs. Brown Brown |
Franklin Credit vs. Global Healthcare REIT | Franklin Credit vs. Freedom Bank of | Franklin Credit vs. Hinto Energy | Franklin Credit vs. Ensurge |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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