Correlation Between SEI Investments and Travelers Companies
Can any of the company-specific risk be diversified away by investing in both SEI Investments and Travelers Companies 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 Travelers Companies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SEI Investments and The Travelers Companies, you can compare the effects of market volatilities on SEI Investments and Travelers Companies 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 Travelers Companies. Check out your portfolio center. Please also check ongoing floating volatility patterns of SEI Investments and Travelers Companies.
Diversification Opportunities for SEI Investments and Travelers Companies
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SEI and Travelers is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding SEI Investments and The Travelers Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The Travelers Companies 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 Travelers Companies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of The Travelers Companies has no effect on the direction of SEI Investments i.e., SEI Investments and Travelers Companies go up and down completely randomly.
Pair Corralation between SEI Investments and Travelers Companies
Given the investment horizon of 90 days SEI Investments is expected to generate 0.7 times more return on investment than Travelers Companies. However, SEI Investments is 1.42 times less risky than Travelers Companies. It trades about 0.37 of its potential returns per unit of risk. The Travelers Companies is currently generating about -0.19 per unit of risk. If you would invest 8,081 in SEI Investments on September 13, 2024 and sell it today you would earn a total of 550.00 from holding SEI Investments or generate 6.81% 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. The Travelers Companies
Performance |
| Timeline |
| SEI Investments |
| The Travelers Companies |
SEI Investments and Travelers Companies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SEI Investments and Travelers Companies
The main advantage of trading using opposite SEI Investments and Travelers Companies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SEI Investments position performs unexpectedly, Travelers Companies 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 Travelers Companies will offset losses from the drop in Travelers Companies' long position.| SEI Investments vs. Commerce Bancshares | SEI Investments vs. RLI Corp | SEI Investments vs. Westamerica Bancorporation | SEI Investments vs. Brown Brown |
| Travelers Companies vs. Chubb | Travelers Companies vs. W R Berkley | Travelers Companies vs. The Allstate | Travelers Companies vs. Markel |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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