Correlation Between Sequoia Financial and Super Retail
Can any of the company-specific risk be diversified away by investing in both Sequoia Financial and Super Retail 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 Super Retail 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 Super Retail Group, you can compare the effects of market volatilities on Sequoia Financial and Super Retail 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 Super Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sequoia Financial and Super Retail.
Diversification Opportunities for Sequoia Financial and Super Retail
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sequoia and Super is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Sequoia Financial Group and Super Retail Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Super Retail Group 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 Super Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Super Retail Group has no effect on the direction of Sequoia Financial i.e., Sequoia Financial and Super Retail go up and down completely randomly.
Pair Corralation between Sequoia Financial and Super Retail
Assuming the 90 days trading horizon Sequoia Financial Group is expected to generate 0.94 times more return on investment than Super Retail. However, Sequoia Financial Group is 1.06 times less risky than Super Retail. It trades about 0.4 of its potential returns per unit of risk. Super Retail Group is currently generating about 0.13 per unit of risk. If you would invest 36.00 in Sequoia Financial Group on October 14, 2024 and sell it today you would earn a total of 4.00 from holding Sequoia Financial Group or generate 11.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sequoia Financial Group vs. Super Retail Group
Performance |
| Timeline |
| Sequoia Financial |
| Super Retail Group |
Sequoia Financial and Super Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sequoia Financial and Super Retail
The main advantage of trading using opposite Sequoia Financial and Super Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sequoia Financial position performs unexpectedly, Super Retail 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 Super Retail will offset losses from the drop in Super Retail's long position.| Sequoia Financial vs. Global Health | Sequoia Financial vs. Falcon Metals | Sequoia Financial vs. Dalaroo Metals | Sequoia Financial vs. Epsilon Healthcare |
| Super Retail vs. Event Hospitality and | Super Retail vs. Oceania Healthcare | Super Retail vs. Sequoia Financial Group | Super Retail vs. Home Consortium |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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