Correlation Between LIFENET INSURANCE and SEI INVESTMENTS

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

By analyzing existing cross correlation between LIFENET INSURANCE CO and SEI INVESTMENTS, you can compare the effects of market volatilities on LIFENET INSURANCE 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 LIFENET INSURANCE with a short position of SEI INVESTMENTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of LIFENET INSURANCE and SEI INVESTMENTS.

Diversification Opportunities for LIFENET INSURANCE and SEI INVESTMENTS

0.62

Correlation Coefficient

LIFENET INSURANCE  SEI INVESTMENTS

Poor diversification

The 3 months correlation between LIFENET and SEI is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding LIFENET INSURANCE CO and SEI INVESTMENTS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEI INVESTMENTS and LIFENET INSURANCE 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 LIFENET INSURANCE CO 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 LIFENET INSURANCE i.e., LIFENET INSURANCE and SEI INVESTMENTS go up and down completely randomly.

Pair Corralation between LIFENET INSURANCE and SEI INVESTMENTS

Assuming the 90 days horizon LIFENET INSURANCE CO is expected to generate 1.13 times more return on investment than SEI INVESTMENTS. However, LIFENET INSURANCE is 1.13 times more volatile than SEI INVESTMENTS. It trades about 0.17 of its potential returns per unit of risk. SEI INVESTMENTS is currently generating about 0.03 per unit of risk. If you would invest  995.00  in LIFENET INSURANCE CO on March 25, 2025 and sell it today you would earn a total of  285.00  from holding LIFENET INSURANCE CO or generate 28.64% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

LIFENET INSURANCE CO  vs.  SEI INVESTMENTS

LIFENET INSURANCE

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in LIFENET INSURANCE CO are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, LIFENET INSURANCE reported solid returns over the last few months and may actually be approaching a breakup point.

SEI INVESTMENTS

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SEI INVESTMENTS are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, SEI INVESTMENTS is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with LIFENET INSURANCE and SEI INVESTMENTS

The main advantage of trading using opposite LIFENET INSURANCE and SEI INVESTMENTS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LIFENET INSURANCE 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's long position.

The idea behind LIFENET INSURANCE CO and SEI INVESTMENTS 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.