Correlation Between Sands Capital and Oshidori International

Can any of the company-specific risk be diversified away by investing in both Sands Capital and Oshidori International 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 Sands Capital and Oshidori International into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Sands Capital Global and Oshidori International Holdings, you can compare the effects of market volatilities on Sands Capital and Oshidori International 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 Sands Capital with a short position of Oshidori International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sands Capital and Oshidori International.

Diversification Opportunities for Sands Capital and Oshidori International

0.84

Correlation Coefficient

Sands Capital  Oshidori International

Very poor diversification

The 3 months correlation between Sands and Oshidori is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Sands Capital Global and Oshidori International Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oshidori International and Sands 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 Sands Capital Global are associated (or correlated) with Oshidori International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oshidori International has no effect on the direction of Sands Capital i.e., Sands Capital and Oshidori International go up and down completely randomly.

Pair Corralation between Sands Capital and Oshidori International

Assuming the 90 days horizon Sands Capital is expected to generate 77.43 times less return on investment than Oshidori International. But when comparing it to its historical volatility, Sands Capital Global is 143.09 times less risky than Oshidori International. It trades about 0.23 of its potential returns per unit of risk. Oshidori International Holdings is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  0.07  in Oshidori International Holdings on September 13, 2024 and sell it today you would earn a total of  0.93  from holding Oshidori International Holdings or generate 1328.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.44%
Values	Daily Returns

Sands Capital Global  vs.  Oshidori International Holding

Sands Capital Global

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Sands Capital Global are ranked lower than 18 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Sands Capital showed solid returns over the last few months and may actually be approaching a breakup point.

Oshidori International

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Oshidori International Holdings are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental indicators, Oshidori International reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sands Capital and Oshidori International

The main advantage of trading using opposite Sands Capital and Oshidori International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sands Capital position performs unexpectedly, Oshidori International 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 Oshidori International will offset losses from the drop in Oshidori International's long position.

The idea behind Sands Capital Global and Oshidori International Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.