Correlation Between Global Health and Sequoia Financial
Can any of the company-specific risk be diversified away by investing in both Global Health 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 Global Health and Sequoia Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Health and Sequoia Financial Group, you can compare the effects of market volatilities on Global Health 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 Global Health with a short position of Sequoia Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Health and Sequoia Financial.
Diversification Opportunities for Global Health and Sequoia Financial
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Global and Sequoia is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Global Health and Sequoia Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sequoia Financial and Global Health 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 Global Health 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 Global Health i.e., Global Health and Sequoia Financial go up and down completely randomly.
Pair Corralation between Global Health and Sequoia Financial
Assuming the 90 days trading horizon Global Health is expected to generate 4.93 times less return on investment than Sequoia Financial. In addition to that, Global Health is 3.38 times more volatile than Sequoia Financial Group. It trades about 0.02 of its total potential returns per unit of risk. Sequoia Financial Group is currently generating about 0.31 per unit of volatility. If you would invest 38.00 in Sequoia Financial Group on October 28, 2024 and sell it today you would earn a total of 3.00 from holding Sequoia Financial Group or generate 7.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Health vs. Sequoia Financial Group
Performance |
| Timeline |
| Global Health |
| Sequoia Financial |
Global Health and Sequoia Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Health and Sequoia Financial
The main advantage of trading using opposite Global Health and Sequoia Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Health 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.| Global Health vs. Microequities Asset Management | Global Health vs. Qbe Insurance Group | Global Health vs. Hutchison Telecommunications | Global Health vs. Aussie Broadband |
| Sequoia Financial vs. Sky Metals | Sequoia Financial vs. Dalaroo Metals | Sequoia Financial vs. Lykos Metals | Sequoia Financial vs. National Storage REIT |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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