Correlation Between Cf Ir and Sequoia Fund

Can any of the company-specific risk be diversified away by investing in both Cf Ir and Sequoia Fund 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 Cf Ir and Sequoia Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cf Ir 3000 and Sequoia Fund Inc, you can compare the effects of market volatilities on Cf Ir and Sequoia Fund 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 Cf Ir with a short position of Sequoia Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cf Ir and Sequoia Fund.

Diversification Opportunities for Cf Ir and Sequoia Fund

0.19

Correlation Coefficient

Cf Ir  Sequoia Fund

Average diversification

The 3 months correlation between IRDEX and Sequoia is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Cf Ir 3000 and Sequoia Fund Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sequoia Fund and Cf Ir 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 Cf Ir 3000 are associated (or correlated) with Sequoia Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sequoia Fund has no effect on the direction of Cf Ir i.e., Cf Ir and Sequoia Fund go up and down completely randomly.

Pair Corralation between Cf Ir and Sequoia Fund

Assuming the 90 days horizon Cf Ir 3000 is expected to under-perform the Sequoia Fund. In addition to that, Cf Ir is 1.18 times more volatile than Sequoia Fund Inc. It trades about -0.07 of its total potential returns per unit of risk. Sequoia Fund Inc is currently generating about 0.12 per unit of volatility. If you would invest  18,416  in Sequoia Fund Inc on December 20, 2024 and sell it today you would earn a total of  1,097  from holding Sequoia Fund Inc or generate 5.96% return on investment over 90 days.

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

Cf Ir 3000  vs.  Sequoia Fund Inc

Cf Ir 3000

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cf Ir 3000 has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Cf Ir is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Sequoia Fund

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sequoia Fund Inc are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Sequoia Fund may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Cf Ir and Sequoia Fund

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

The idea behind Cf Ir 3000 and Sequoia Fund Inc 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 Global Correlations module to find global opportunities by holding instruments from different markets.