Correlation Between SEI Investments and Stepstone
Can any of the company-specific risk be diversified away by investing in both SEI Investments and Stepstone 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 Stepstone into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SEI Investments and Stepstone Group, you can compare the effects of market volatilities on SEI Investments and Stepstone 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 Stepstone. Check out your portfolio center. Please also check ongoing floating volatility patterns of SEI Investments and Stepstone.
Diversification Opportunities for SEI Investments and Stepstone
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between SEI and Stepstone is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding SEI Investments and Stepstone Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stepstone 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 Stepstone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stepstone Group has no effect on the direction of SEI Investments i.e., SEI Investments and Stepstone go up and down completely randomly.
Pair Corralation between SEI Investments and Stepstone
Given the investment horizon of 90 days SEI Investments is expected to generate 1.05 times less return on investment than Stepstone. But when comparing it to its historical volatility, SEI Investments is 2.37 times less risky than Stepstone. It trades about 0.3 of its potential returns per unit of risk. Stepstone Group is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 6,158 in Stepstone Group on August 28, 2024 and sell it today you would earn a total of 515.00 from holding Stepstone Group or generate 8.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SEI Investments vs. Stepstone Group
Performance |
| Timeline |
| SEI Investments |
| Stepstone Group |
SEI Investments and Stepstone Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SEI Investments and Stepstone
The main advantage of trading using opposite SEI Investments and Stepstone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SEI Investments position performs unexpectedly, Stepstone 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 Stepstone will offset losses from the drop in Stepstone's long position.| SEI Investments vs. Aurora Innovation | SEI Investments vs. HUMANA INC | SEI Investments vs. Aquagold International | SEI Investments vs. Barloworld Ltd ADR |
| Stepstone vs. Munivest Fund | Stepstone vs. Blackrock Muniyield Quality | Stepstone vs. Federated Investors B | Stepstone vs. Federated Premier Municipal |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
Other Complementary Tools
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Global Correlations Find global opportunities by holding instruments from different markets |