Correlation Between Sandon Capital and K2 Asset
Can any of the company-specific risk be diversified away by investing in both Sandon Capital and K2 Asset 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 K2 Asset 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 K2 Asset Management, you can compare the effects of market volatilities on Sandon Capital and K2 Asset 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 K2 Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sandon Capital and K2 Asset.
Diversification Opportunities for Sandon Capital and K2 Asset
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sandon and KAM is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Sandon Capital Investments and K2 Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on K2 Asset Management 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 K2 Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of K2 Asset Management has no effect on the direction of Sandon Capital i.e., Sandon Capital and K2 Asset go up and down completely randomly.
Pair Corralation between Sandon Capital and K2 Asset
Assuming the 90 days trading horizon Sandon Capital is expected to generate 3.54 times less return on investment than K2 Asset. But when comparing it to its historical volatility, Sandon Capital Investments is 4.06 times less risky than K2 Asset. It trades about 0.13 of its potential returns per unit of risk. K2 Asset Management is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 7.10 in K2 Asset Management on November 7, 2024 and sell it today you would earn a total of 0.60 from holding K2 Asset Management or generate 8.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Sandon Capital Investments vs. K2 Asset Management
Performance |
| Timeline |
| Sandon Capital Inves |
| K2 Asset Management |
Sandon Capital and K2 Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sandon Capital and K2 Asset
The main advantage of trading using opposite Sandon Capital and K2 Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sandon Capital position performs unexpectedly, K2 Asset 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 K2 Asset will offset losses from the drop in K2 Asset's long position.| Sandon Capital vs. Hudson Investment Group | Sandon Capital vs. Vitura Health Limited | Sandon Capital vs. Ramsay Health Care | Sandon Capital vs. EVE Health Group |
| K2 Asset vs. Medibank Private | K2 Asset vs. Iron Road | K2 Asset vs. National Australia Bank | K2 Asset vs. Latitude Financial Services |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |