Correlation Between Sequoia Financial and Sandon Capital
Can any of the company-specific risk be diversified away by investing in both Sequoia Financial and Sandon Capital 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 Sequoia Financial and Sandon Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sequoia Financial Group and Sandon Capital Investments, you can compare the effects of market volatilities on Sequoia Financial and Sandon Capital 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 Sequoia Financial with a short position of Sandon Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sequoia Financial and Sandon Capital.
Diversification Opportunities for Sequoia Financial and Sandon Capital
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Sequoia and Sandon is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Sequoia Financial Group and Sandon Capital Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sandon Capital Inves and Sequoia Financial 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 Sequoia Financial Group are associated (or correlated) with Sandon Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sandon Capital Inves has no effect on the direction of Sequoia Financial i.e., Sequoia Financial and Sandon Capital go up and down completely randomly.
Pair Corralation between Sequoia Financial and Sandon Capital
Assuming the 90 days trading horizon Sequoia Financial Group is expected to generate 0.83 times more return on investment than Sandon Capital. However, Sequoia Financial Group is 1.21 times less risky than Sandon Capital. It trades about 0.33 of its potential returns per unit of risk. Sandon Capital Investments is currently generating about 0.14 per unit of risk. If you would invest 37.00 in Sequoia Financial Group on October 16, 2024 and sell it today you would earn a total of 3.00 from holding Sequoia Financial Group or generate 8.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
Sequoia Financial Group vs. Sandon Capital Investments
Performance |
| Timeline |
| Sequoia Financial |
| Sandon Capital Inves |
Sequoia Financial and Sandon Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sequoia Financial and Sandon Capital
The main advantage of trading using opposite Sequoia Financial and Sandon Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sequoia Financial position performs unexpectedly, Sandon Capital 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 Sandon Capital will offset losses from the drop in Sandon Capital's long position.| Sequoia Financial vs. Westpac Banking | Sequoia Financial vs. Sonic Healthcare | Sequoia Financial vs. Credit Clear | Sequoia Financial vs. Bank of Queensland |
| Sandon Capital vs. Duxton Broadacre Farms | Sandon Capital vs. ABACUS STORAGE KING | Sandon Capital vs. Actinogen Medical | Sandon Capital vs. Ras Technology Holdings |
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 Stocks Directory module to find actively traded stocks across global markets.
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