Correlation Between Aristocrat Leisure and Sandon Capital
Can any of the company-specific risk be diversified away by investing in both Aristocrat Leisure and Sandon Capital 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 Aristocrat Leisure and Sandon Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aristocrat Leisure and Sandon Capital Investments, you can compare the effects of market volatilities on Aristocrat Leisure and Sandon Capital 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 Aristocrat Leisure with a short position of Sandon Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aristocrat Leisure and Sandon Capital.
Diversification Opportunities for Aristocrat Leisure and Sandon Capital
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Aristocrat and Sandon is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Aristocrat Leisure and Sandon Capital Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sandon Capital Inves and Aristocrat Leisure 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 Aristocrat Leisure are associated (or correlated) with Sandon Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sandon Capital Inves has no effect on the direction of Aristocrat Leisure i.e., Aristocrat Leisure and Sandon Capital go up and down completely randomly.
Pair Corralation between Aristocrat Leisure and Sandon Capital
Assuming the 90 days trading horizon Aristocrat Leisure is expected to generate 1.37 times more return on investment than Sandon Capital. However, Aristocrat Leisure is 1.37 times more volatile than Sandon Capital Investments. It trades about 0.15 of its potential returns per unit of risk. Sandon Capital Investments is currently generating about 0.12 per unit of risk. If you would invest 6,836 in Aristocrat Leisure on November 1, 2024 and sell it today you would earn a total of 299.00 from holding Aristocrat Leisure or generate 4.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aristocrat Leisure vs. Sandon Capital Investments
Performance |
| Timeline |
| Aristocrat Leisure |
| Sandon Capital Inves |
Aristocrat Leisure and Sandon Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aristocrat Leisure and Sandon Capital
The main advantage of trading using opposite Aristocrat Leisure and Sandon Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aristocrat Leisure position performs unexpectedly, Sandon Capital 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 Sandon Capital will offset losses from the drop in Sandon Capital's long position.| Aristocrat Leisure vs. Sky Metals | Aristocrat Leisure vs. Data3 | Aristocrat Leisure vs. Kneomedia | Aristocrat Leisure vs. Dalaroo Metals |
| Sandon Capital vs. Aristocrat Leisure | Sandon Capital vs. Carawine Resources Limited | Sandon Capital vs. Insignia Financial | Sandon Capital vs. MA Financial Group |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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