Correlation Between Sandon Capital and Nufarm
Can any of the company-specific risk be diversified away by investing in both Sandon Capital and Nufarm 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 Nufarm 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 Nufarm, you can compare the effects of market volatilities on Sandon Capital and Nufarm 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 Nufarm. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sandon Capital and Nufarm.
Diversification Opportunities for Sandon Capital and Nufarm
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sandon and Nufarm is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Sandon Capital Investments and Nufarm in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nufarm 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 Nufarm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nufarm has no effect on the direction of Sandon Capital i.e., Sandon Capital and Nufarm go up and down completely randomly.
Pair Corralation between Sandon Capital and Nufarm
Assuming the 90 days trading horizon Sandon Capital Investments is expected to generate 1.09 times more return on investment than Nufarm. However, Sandon Capital is 1.09 times more volatile than Nufarm. It trades about 0.06 of its potential returns per unit of risk. Nufarm is currently generating about -0.04 per unit of risk. If you would invest 55.00 in Sandon Capital Investments on September 2, 2024 and sell it today you would earn a total of 22.00 from holding Sandon Capital Investments or generate 40.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.73% |
| Values | Daily Returns |
Sandon Capital Investments vs. Nufarm
Performance |
| Timeline |
| Sandon Capital Inves |
| Nufarm |
Sandon Capital and Nufarm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sandon Capital and Nufarm
The main advantage of trading using opposite Sandon Capital and Nufarm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sandon Capital position performs unexpectedly, Nufarm 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 Nufarm will offset losses from the drop in Nufarm's long position.| Sandon Capital vs. Super Retail Group | Sandon Capital vs. Flagship Investments | Sandon Capital vs. Aspire Mining | Sandon Capital vs. Truscott Mining Corp |
| Nufarm vs. Ragnar Metals | Nufarm vs. Viva Leisure | Nufarm vs. Computershare | Nufarm vs. Bailador Technology Invest |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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