Correlation Between FireFly Metals and Sequoia Financial
Can any of the company-specific risk be diversified away by investing in both FireFly Metals and Sequoia Financial 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 FireFly Metals and Sequoia Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FireFly Metals and Sequoia Financial Group, you can compare the effects of market volatilities on FireFly Metals and Sequoia Financial 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 FireFly Metals with a short position of Sequoia Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of FireFly Metals and Sequoia Financial.
Diversification Opportunities for FireFly Metals and Sequoia Financial
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between FireFly and Sequoia is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding FireFly Metals and Sequoia Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sequoia Financial and FireFly Metals 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 FireFly Metals are associated (or correlated) with Sequoia Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sequoia Financial has no effect on the direction of FireFly Metals i.e., FireFly Metals and Sequoia Financial go up and down completely randomly.
Pair Corralation between FireFly Metals and Sequoia Financial
Assuming the 90 days trading horizon FireFly Metals is expected to generate 1.87 times more return on investment than Sequoia Financial. However, FireFly Metals is 1.87 times more volatile than Sequoia Financial Group. It trades about 0.04 of its potential returns per unit of risk. Sequoia Financial Group is currently generating about 0.02 per unit of risk. If you would invest 63.00 in FireFly Metals on November 5, 2024 and sell it today you would earn a total of 30.00 from holding FireFly Metals or generate 47.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FireFly Metals vs. Sequoia Financial Group
Performance |
| Timeline |
| FireFly Metals |
| Sequoia Financial |
FireFly Metals and Sequoia Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FireFly Metals and Sequoia Financial
The main advantage of trading using opposite FireFly Metals and Sequoia Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FireFly Metals position performs unexpectedly, Sequoia Financial 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 Sequoia Financial will offset losses from the drop in Sequoia Financial's long position.| FireFly Metals vs. Northern Star Resources | FireFly Metals vs. Evolution Mining | FireFly Metals vs. Bluescope Steel | FireFly Metals vs. De Grey Mining |
| Sequoia Financial vs. Cleanaway Waste Management | Sequoia Financial vs. Qbe Insurance Group | Sequoia Financial vs. Stelar Metals | Sequoia Financial vs. 29Metals |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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