Correlation Between SEI Investments and Summit Bank
Can any of the company-specific risk be diversified away by investing in both SEI Investments and Summit Bank 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 Summit Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SEI Investments and Summit Bank Group, you can compare the effects of market volatilities on SEI Investments and Summit Bank 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 Summit Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of SEI Investments and Summit Bank.
Diversification Opportunities for SEI Investments and Summit Bank
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between SEI and Summit is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding SEI Investments and Summit Bank Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Summit Bank Group 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 Summit Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Summit Bank Group has no effect on the direction of SEI Investments i.e., SEI Investments and Summit Bank go up and down completely randomly.
Pair Corralation between SEI Investments and Summit Bank
Given the investment horizon of 90 days SEI Investments is expected to generate 0.97 times more return on investment than Summit Bank. However, SEI Investments is 1.03 times less risky than Summit Bank. It trades about 0.19 of its potential returns per unit of risk. Summit Bank Group is currently generating about -0.03 per unit of risk. If you would invest 8,192 in SEI Investments on November 3, 2024 and sell it today you would earn a total of 466.00 from holding SEI Investments or generate 5.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SEI Investments vs. Summit Bank Group
Performance |
| Timeline |
| SEI Investments |
| Summit Bank Group |
SEI Investments and Summit Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SEI Investments and Summit Bank
The main advantage of trading using opposite SEI Investments and Summit Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SEI Investments position performs unexpectedly, Summit Bank 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 Summit Bank will offset losses from the drop in Summit Bank's long position.| SEI Investments vs. Commerce Bancshares | SEI Investments vs. RLI Corp | SEI Investments vs. Westamerica Bancorporation | SEI Investments vs. Brown Brown |
| Summit Bank vs. Merchants Marine Bancorp | Summit Bank vs. Mission Valley Bancorp | Summit Bank vs. Harbor Bankshares | Summit Bank vs. Oconee Financial |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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