Correlation Between Sandon Capital and Boss Energy
Can any of the company-specific risk be diversified away by investing in both Sandon Capital and Boss Energy 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 Boss Energy 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 Boss Energy Limited, you can compare the effects of market volatilities on Sandon Capital and Boss Energy 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 Boss Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sandon Capital and Boss Energy.
Diversification Opportunities for Sandon Capital and Boss Energy
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sandon and Boss is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Sandon Capital Investments and Boss Energy Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boss Energy Limited 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 Boss Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boss Energy Limited has no effect on the direction of Sandon Capital i.e., Sandon Capital and Boss Energy go up and down completely randomly.
Pair Corralation between Sandon Capital and Boss Energy
Assuming the 90 days trading horizon Sandon Capital Investments is expected to generate 0.62 times more return on investment than Boss Energy. However, Sandon Capital Investments is 1.6 times less risky than Boss Energy. It trades about 0.01 of its potential returns per unit of risk. Boss Energy Limited is currently generating about -0.21 per unit of risk. If you would invest 79.00 in Sandon Capital Investments on September 15, 2024 and sell it today you would earn a total of 0.00 from holding Sandon Capital Investments or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sandon Capital Investments vs. Boss Energy Limited
Performance |
| Timeline |
| Sandon Capital Inves |
| Boss Energy Limited |
Sandon Capital and Boss Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sandon Capital and Boss Energy
The main advantage of trading using opposite Sandon Capital and Boss Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sandon Capital position performs unexpectedly, Boss Energy 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 Boss Energy will offset losses from the drop in Boss Energy's long position.| Sandon Capital vs. Australian Foundation Investment | Sandon Capital vs. MFF Capital Investments | Sandon Capital vs. Metrics Master Income | Sandon Capital vs. L1 Long Short |
| Boss Energy vs. Autosports Group | Boss Energy vs. REGAL ASIAN INVESTMENTS | Boss Energy vs. Mirrabooka Investments | Boss Energy vs. Sandon Capital Investments |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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