Correlation Between Sequoia Logstica and Wetzel SA

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

By analyzing existing cross correlation between Sequoia Logstica e and Wetzel SA, you can compare the effects of market volatilities on Sequoia Logstica and Wetzel SA 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 Logstica with a short position of Wetzel SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sequoia Logstica and Wetzel SA.

Diversification Opportunities for Sequoia Logstica and Wetzel SA

0.65

Correlation Coefficient

Sequoia Logstica  Wetzel SA

Poor diversification

The 3 months correlation between Sequoia and Wetzel is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Sequoia Logstica e and Wetzel SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wetzel SA and Sequoia Logstica 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 Logstica e are associated (or correlated) with Wetzel SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wetzel SA has no effect on the direction of Sequoia Logstica i.e., Sequoia Logstica and Wetzel SA go up and down completely randomly.

Pair Corralation between Sequoia Logstica and Wetzel SA

Assuming the 90 days trading horizon Sequoia Logstica e is expected to under-perform the Wetzel SA. In addition to that, Sequoia Logstica is 1.16 times more volatile than Wetzel SA. It trades about -0.12 of its total potential returns per unit of risk. Wetzel SA is currently generating about -0.11 per unit of volatility. If you would invest  1,501  in Wetzel SA on November 27, 2024 and sell it today you would lose (451.00) from holding Wetzel SA or give up 30.05% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.36%
Values	Daily Returns

Sequoia Logstica e  vs.  Wetzel SA

Sequoia Logstica e

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sequoia Logstica e has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in March 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Wetzel SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Wetzel SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Preferred Stock's basic indicators remain comparatively stable which may send shares a bit higher in March 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Sequoia Logstica and Wetzel SA

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

The idea behind Sequoia Logstica e and Wetzel SA 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.