Correlation Between SEI Investments and HUMANA

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

By analyzing existing cross correlation between SEI Investments and HUMANA INC 395, you can compare the effects of market volatilities on SEI Investments and HUMANA 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 HUMANA. Check out your portfolio center. Please also check ongoing floating volatility patterns of SEI Investments and HUMANA.

Diversification Opportunities for SEI Investments and HUMANA

-0.62

Correlation Coefficient

SEI Investments  HUMANA

Excellent diversification

The 3 months correlation between SEI and HUMANA is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding SEI Investments and HUMANA INC 395 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HUMANA INC 5 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 HUMANA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HUMANA INC 5 has no effect on the direction of SEI Investments i.e., SEI Investments and HUMANA go up and down completely randomly.

Pair Corralation between SEI Investments and HUMANA

Given the investment horizon of 90 days SEI Investments is expected to generate 3.79 times more return on investment than HUMANA. However, SEI Investments is 3.79 times more volatile than HUMANA INC 395. It trades about 0.1 of its potential returns per unit of risk. HUMANA INC 395 is currently generating about 0.01 per unit of risk. If you would invest  5,664  in SEI Investments on September 14, 2024 and sell it today you would earn a total of  2,994  from holding SEI Investments or generate 52.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	96.95%
Values	Daily Returns

SEI Investments  vs.  HUMANA INC 395

SEI Investments

Risk-Adjusted Performance

26 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in SEI Investments are ranked lower than 26 (%) of all global equities and portfolios over the last 90 days. In spite of rather abnormal forward indicators, SEI Investments exhibited solid returns over the last few months and may actually be approaching a breakup point.

HUMANA INC 5

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HUMANA INC 395 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, HUMANA is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with SEI Investments and HUMANA

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

The idea behind SEI Investments and HUMANA INC 395 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.