Correlation Between Sei Insti and The Tocqueville

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

By analyzing existing cross correlation between Sei Insti Mgd and The Tocqueville Fund, you can compare the effects of market volatilities on Sei Insti and The Tocqueville 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 Insti with a short position of The Tocqueville. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sei Insti and The Tocqueville.

Diversification Opportunities for Sei Insti and The Tocqueville

0.54

Correlation Coefficient

Sei Insti  The Tocqueville

Very weak diversification

The 3 months correlation between Sei and THE is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Sei Insti Mgd and The Tocqueville Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The Tocqueville and Sei Insti 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 Insti Mgd are associated (or correlated) with The Tocqueville. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of The Tocqueville has no effect on the direction of Sei Insti i.e., Sei Insti and The Tocqueville go up and down completely randomly.

Pair Corralation between Sei Insti and The Tocqueville

Assuming the 90 days horizon Sei Insti is expected to generate 28.68 times less return on investment than The Tocqueville. But when comparing it to its historical volatility, Sei Insti Mgd is 2.34 times less risky than The Tocqueville. It trades about 0.03 of its potential returns per unit of risk. The Tocqueville Fund is currently generating about 0.36 of returns per unit of risk over similar time horizon. If you would invest  4,439  in The Tocqueville Fund on April 25, 2025 and sell it today you would earn a total of  761.00  from holding The Tocqueville Fund or generate 17.14% return on investment over 90 days.

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

Sei Insti Mgd  vs.  The Tocqueville Fund

Sei Insti Mgd

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sei Insti Mgd are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Sei Insti is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

The Tocqueville

Risk-Adjusted Performance

Strong

Over the last 90 days The Tocqueville Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly weak basic indicators, The Tocqueville showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sei Insti and The Tocqueville

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

The idea behind Sei Insti Mgd and The Tocqueville Fund 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.