Correlation Between SEI Investments and Clearbridge Energy

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

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

Diversification Opportunities for SEI Investments and Clearbridge Energy

0.76

Correlation Coefficient

SEI Investments  Clearbridge Energy

Poor diversification

The 3 months correlation between SEI and Clearbridge is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding SEI Investments and Clearbridge Energy Mlp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clearbridge Energy Mlp 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 Clearbridge Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clearbridge Energy Mlp has no effect on the direction of SEI Investments i.e., SEI Investments and Clearbridge Energy go up and down completely randomly.

Pair Corralation between SEI Investments and Clearbridge Energy

Given the investment horizon of 90 days SEI Investments is expected to generate 1.02 times less return on investment than Clearbridge Energy. In addition to that, SEI Investments is 1.05 times more volatile than Clearbridge Energy Mlp. It trades about 0.11 of its total potential returns per unit of risk. Clearbridge Energy Mlp is currently generating about 0.11 per unit of volatility. If you would invest  3,795  in Clearbridge Energy Mlp on October 5, 2024 and sell it today you would earn a total of  1,320  from holding Clearbridge Energy Mlp or generate 34.78% return on investment over 90 days.

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

SEI Investments  vs.  Clearbridge Energy Mlp

SEI Investments

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in SEI Investments are ranked lower than 16 (%) 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.

Clearbridge Energy Mlp

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Clearbridge Energy Mlp are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Clearbridge Energy 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 Clearbridge Energy

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

The idea behind SEI Investments and Clearbridge Energy Mlp 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.