Correlation Between Retail Food and Sandon Capital
Can any of the company-specific risk be diversified away by investing in both Retail Food 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 Retail Food and Sandon Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Retail Food Group and Sandon Capital Investments, you can compare the effects of market volatilities on Retail Food 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 Retail Food with a short position of Sandon Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Retail Food and Sandon Capital.
Diversification Opportunities for Retail Food and Sandon Capital
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Retail and Sandon is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Retail Food Group 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 Retail Food 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 Retail Food Group 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 Retail Food i.e., Retail Food and Sandon Capital go up and down completely randomly.
Pair Corralation between Retail Food and Sandon Capital
Assuming the 90 days trading horizon Retail Food Group is expected to under-perform the Sandon Capital. In addition to that, Retail Food is 2.26 times more volatile than Sandon Capital Investments. It trades about -0.3 of its total potential returns per unit of risk. Sandon Capital Investments is currently generating about 0.07 per unit of volatility. If you would invest 80.00 in Sandon Capital Investments on November 4, 2024 and sell it today you would earn a total of 1.00 from holding Sandon Capital Investments or generate 1.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Retail Food Group vs. Sandon Capital Investments
Performance |
| Timeline |
| Retail Food Group |
| Sandon Capital Inves |
Retail Food and Sandon Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Retail Food and Sandon Capital
The main advantage of trading using opposite Retail Food and Sandon Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Retail Food 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.| Retail Food vs. Aussie Broadband | Retail Food vs. A1 Investments Resources | Retail Food vs. Navigator Global Investments | Retail Food vs. Hotel Property Investments |
| Sandon Capital vs. Pinnacle Investment Management | Sandon Capital vs. Microequities Asset Management | Sandon Capital vs. Advanced Braking Technology | Sandon Capital vs. Technology One |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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