Correlation Between Suntory Beverage and Sands China
Can any of the company-specific risk be diversified away by investing in both Suntory Beverage and Sands China 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 Suntory Beverage and Sands China into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Suntory Beverage Food and Sands China, you can compare the effects of market volatilities on Suntory Beverage and Sands China 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 Suntory Beverage with a short position of Sands China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Suntory Beverage and Sands China.
Diversification Opportunities for Suntory Beverage and Sands China
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Suntory and Sands is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Suntory Beverage Food and Sands China in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sands China and Suntory Beverage 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 Suntory Beverage Food are associated (or correlated) with Sands China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sands China has no effect on the direction of Suntory Beverage i.e., Suntory Beverage and Sands China go up and down completely randomly.
Pair Corralation between Suntory Beverage and Sands China
Assuming the 90 days horizon Suntory Beverage Food is expected to generate 0.96 times more return on investment than Sands China. However, Suntory Beverage Food is 1.04 times less risky than Sands China. It trades about -0.13 of its potential returns per unit of risk. Sands China is currently generating about -0.54 per unit of risk. If you would invest 3,000 in Suntory Beverage Food on October 20, 2024 and sell it today you would lose (112.00) from holding Suntory Beverage Food or give up 3.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Suntory Beverage Food vs. Sands China
Performance |
| Timeline |
| Suntory Beverage Food |
| Sands China |
Suntory Beverage and Sands China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Suntory Beverage and Sands China
The main advantage of trading using opposite Suntory Beverage and Sands China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Suntory Beverage position performs unexpectedly, Sands China 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 Sands China will offset losses from the drop in Sands China's long position.| Suntory Beverage vs. Pembina Pipeline Corp | Suntory Beverage vs. PRECISION DRILLING P | Suntory Beverage vs. Urban Outfitters | Suntory Beverage vs. American Eagle Outfitters |
| Sands China vs. Las Vegas Sands | Sands China vs. Galaxy Entertainment Group | Sands China vs. MGM Resorts International | Sands China vs. Wynn Resorts Limited |
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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