Correlation Between Franklin Resources and SEI Investments
Can any of the company-specific risk be diversified away by investing in both Franklin Resources and SEI Investments 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 Franklin Resources and SEI Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Resources and SEI Investments, you can compare the effects of market volatilities on Franklin Resources and SEI Investments 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 Franklin Resources with a short position of SEI Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Resources and SEI Investments.
Diversification Opportunities for Franklin Resources and SEI Investments
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Franklin and SEI is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Resources and SEI Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEI Investments and Franklin Resources 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 Franklin Resources are associated (or correlated) with SEI Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEI Investments has no effect on the direction of Franklin Resources i.e., Franklin Resources and SEI Investments go up and down completely randomly.
Pair Corralation between Franklin Resources and SEI Investments
Considering the 90-day investment horizon Franklin Resources is expected to generate 1.23 times less return on investment than SEI Investments. In addition to that, Franklin Resources is 2.13 times more volatile than SEI Investments. It trades about 0.08 of its total potential returns per unit of risk. SEI Investments is currently generating about 0.2 per unit of volatility. If you would invest 8,148 in SEI Investments on November 9, 2024 and sell it today you would earn a total of 476.00 from holding SEI Investments or generate 5.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Resources vs. SEI Investments
Performance |
| Timeline |
| Franklin Resources |
| SEI Investments |
Franklin Resources and SEI Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Resources and SEI Investments
The main advantage of trading using opposite Franklin Resources and SEI Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Resources position performs unexpectedly, SEI Investments 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 SEI Investments will offset losses from the drop in SEI Investments' long position.| Franklin Resources vs. BlackRock | Franklin Resources vs. Main Street Capital | Franklin Resources vs. Blackstone Group | Franklin Resources vs. Ares Capital |
| SEI Investments vs. Commerce Bancshares | SEI Investments vs. RLI Corp | SEI Investments vs. Westamerica Bancorporation | SEI Investments vs. Brown Brown |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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