Correlation Between SEI Investments and KeyCorp

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

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

Diversification Opportunities for SEI Investments and KeyCorp

-0.38

Correlation Coefficient

SEI Investments  KeyCorp

Very good diversification

The 3 months correlation between SEI and KeyCorp is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding SEI Investments and KeyCorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KeyCorp 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 KeyCorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KeyCorp has no effect on the direction of SEI Investments i.e., SEI Investments and KeyCorp go up and down completely randomly.

Pair Corralation between SEI Investments and KeyCorp

Given the investment horizon of 90 days SEI Investments is expected to under-perform the KeyCorp. In addition to that, SEI Investments is 1.72 times more volatile than KeyCorp. It trades about -0.09 of its total potential returns per unit of risk. KeyCorp is currently generating about 0.17 per unit of volatility. If you would invest  2,345  in KeyCorp on December 19, 2024 and sell it today you would earn a total of  180.00  from holding KeyCorp or generate 7.68% 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.  KeyCorp

SEI Investments

Risk-Adjusted Performance

Very Weak

Over the last 90 days SEI Investments has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Stock's forward indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

KeyCorp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in KeyCorp are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite fairly sluggish basic indicators, KeyCorp may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with SEI Investments and KeyCorp

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

The idea behind SEI Investments and KeyCorp 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.