Correlation Between Sandon Capital and BKI Investment
Can any of the company-specific risk be diversified away by investing in both Sandon Capital and BKI Investment 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 Sandon Capital and BKI Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sandon Capital Investments and BKI Investment, you can compare the effects of market volatilities on Sandon Capital and BKI Investment 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 Sandon Capital with a short position of BKI Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sandon Capital and BKI Investment.
Diversification Opportunities for Sandon Capital and BKI Investment
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sandon and BKI is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Sandon Capital Investments and BKI Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BKI Investment and Sandon Capital 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 Sandon Capital Investments are associated (or correlated) with BKI Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BKI Investment has no effect on the direction of Sandon Capital i.e., Sandon Capital and BKI Investment go up and down completely randomly.
Pair Corralation between Sandon Capital and BKI Investment
Assuming the 90 days trading horizon Sandon Capital Investments is expected to generate 1.33 times more return on investment than BKI Investment. However, Sandon Capital is 1.33 times more volatile than BKI Investment. It trades about 0.18 of its potential returns per unit of risk. BKI Investment is currently generating about 0.11 per unit of risk. If you would invest 78.00 in Sandon Capital Investments on October 25, 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 Together |
| Strength | Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Sandon Capital Investments vs. BKI Investment
Performance |
| Timeline |
| Sandon Capital Inves |
| BKI Investment |
Sandon Capital and BKI Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sandon Capital and BKI Investment
The main advantage of trading using opposite Sandon Capital and BKI Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sandon Capital position performs unexpectedly, BKI Investment 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 BKI Investment will offset losses from the drop in BKI Investment's long position.| Sandon Capital vs. EROAD | Sandon Capital vs. Computershare | Sandon Capital vs. Nine Entertainment Co | Sandon Capital vs. Duxton Broadacre Farms |
| BKI Investment vs. Mayfield Childcare | BKI Investment vs. Ambertech | BKI Investment vs. Maggie Beer Holdings | BKI Investment vs. Retail Food 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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