Correlation Between Sequoia Financial and Kinatico

Can any of the company-specific risk be diversified away by investing in both Sequoia Financial and Kinatico 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 Kinatico 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 Kinatico, you can compare the effects of market volatilities on Sequoia Financial and Kinatico 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 Kinatico. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sequoia Financial and Kinatico.

Diversification Opportunities for Sequoia Financial and Kinatico

-0.01

Correlation Coefficient

Sequoia Financial  Kinatico

Good diversification

The 3 months correlation between Sequoia and Kinatico is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Sequoia Financial Group and Kinatico in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinatico 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 Kinatico. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinatico has no effect on the direction of Sequoia Financial i.e., Sequoia Financial and Kinatico go up and down completely randomly.

Pair Corralation between Sequoia Financial and Kinatico

If you would invest  36.00  in Sequoia Financial Group on October 11, 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 Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Sequoia Financial Group  vs.  Kinatico

Sequoia Financial

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Sequoia Financial Group are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Sequoia Financial may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Kinatico

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Kinatico are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Kinatico unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sequoia Financial and Kinatico

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

The idea behind Sequoia Financial Group and Kinatico 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.