Correlation Between K2 Asset and Sandon Capital
Can any of the company-specific risk be diversified away by investing in both K2 Asset 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 K2 Asset and Sandon Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between K2 Asset Management and Sandon Capital Investments, you can compare the effects of market volatilities on K2 Asset 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 K2 Asset with a short position of Sandon Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of K2 Asset and Sandon Capital.
Diversification Opportunities for K2 Asset and Sandon Capital
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between KAM and Sandon is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding K2 Asset Management 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 K2 Asset 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 K2 Asset Management 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 K2 Asset i.e., K2 Asset and Sandon Capital go up and down completely randomly.
Pair Corralation between K2 Asset and Sandon Capital
Assuming the 90 days trading horizon K2 Asset Management is expected to under-perform the Sandon Capital. In addition to that, K2 Asset is 1.51 times more volatile than Sandon Capital Investments. It trades about -0.22 of its total potential returns per unit of risk. Sandon Capital Investments is currently generating about 0.2 per unit of volatility. If you would invest 78.00 in Sandon Capital Investments on October 29, 2024 and sell it today you would earn a total of 3.00 from holding Sandon Capital Investments or generate 3.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
K2 Asset Management vs. Sandon Capital Investments
Performance |
| Timeline |
| K2 Asset Management |
| Sandon Capital Inves |
K2 Asset and Sandon Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with K2 Asset and Sandon Capital
The main advantage of trading using opposite K2 Asset and Sandon Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if K2 Asset 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.| K2 Asset vs. Genetic Technologies | K2 Asset vs. Autosports Group | K2 Asset vs. MetalsGrove Mining | K2 Asset vs. Energy Technologies Limited |
| Sandon Capital vs. Health and Plant | Sandon Capital vs. K2 Asset Management | Sandon Capital vs. Global Health | Sandon Capital vs. Regal Funds Management |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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