Correlation Between Sequans Communications and Alpha
Can any of the company-specific risk be diversified away by investing in both Sequans Communications and Alpha 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 Sequans Communications and Alpha into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sequans Communications SA and Alpha and Omega, you can compare the effects of market volatilities on Sequans Communications and Alpha 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 Sequans Communications with a short position of Alpha. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sequans Communications and Alpha.
Diversification Opportunities for Sequans Communications and Alpha
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sequans and Alpha is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Sequans Communications SA and Alpha and Omega in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alpha and Omega and Sequans Communications 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 Sequans Communications SA are associated (or correlated) with Alpha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alpha and Omega has no effect on the direction of Sequans Communications i.e., Sequans Communications and Alpha go up and down completely randomly.
Pair Corralation between Sequans Communications and Alpha
Given the investment horizon of 90 days Sequans Communications SA is expected to generate 1.89 times more return on investment than Alpha. However, Sequans Communications is 1.89 times more volatile than Alpha and Omega. It trades about 0.1 of its potential returns per unit of risk. Alpha and Omega is currently generating about 0.02 per unit of risk. If you would invest 132.00 in Sequans Communications SA on October 22, 2024 and sell it today you would earn a total of 169.00 from holding Sequans Communications SA or generate 128.03% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Sequans Communications SA vs. Alpha and Omega
Performance |
Timeline |
Sequans Communications |
Alpha and Omega |
Sequans Communications and Alpha Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sequans Communications and Alpha
The main advantage of trading using opposite Sequans Communications and Alpha positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sequans Communications position performs unexpectedly, Alpha 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 Alpha will offset losses from the drop in Alpha's long position.Sequans Communications vs. QuickLogic | Sequans Communications vs. Power Integrations | Sequans Communications vs. Silicon Laboratories | Sequans Communications vs. FormFactor |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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