Correlation Between Skycity Entertainment and Sandon Capital

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

By analyzing existing cross correlation between Skycity Entertainment Group and Sandon Capital Investments, you can compare the effects of market volatilities on Skycity Entertainment and Sandon Capital 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 Skycity Entertainment with a short position of Sandon Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Skycity Entertainment and Sandon Capital.

Diversification Opportunities for Skycity Entertainment and Sandon Capital

-0.12

Correlation Coefficient

Skycity Entertainment  Sandon Capital

Good diversification

The 3 months correlation between Skycity and Sandon is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Skycity Entertainment Group and Sandon Capital Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sandon Capital Inves and Skycity Entertainment 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 Skycity Entertainment Group are associated (or correlated) with Sandon Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sandon Capital Inves has no effect on the direction of Skycity Entertainment i.e., Skycity Entertainment and Sandon Capital go up and down completely randomly.

Pair Corralation between Skycity Entertainment and Sandon Capital

Assuming the 90 days trading horizon Skycity Entertainment Group is expected to under-perform the Sandon Capital. In addition to that, Skycity Entertainment is 1.1 times more volatile than Sandon Capital Investments. It trades about -0.03 of its total potential returns per unit of risk. Sandon Capital Investments is currently generating about 0.05 per unit of volatility. If you would invest  56.00  in Sandon Capital Investments on September 19, 2024 and sell it today you would earn a total of  24.00  from holding Sandon Capital Investments or generate 42.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

Skycity Entertainment Group  vs.  Sandon Capital Investments

Skycity Entertainment

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Skycity Entertainment Group are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain fundamental indicators, Skycity Entertainment may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Sandon Capital Inves

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Sandon Capital Investments are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain fundamental indicators, Sandon Capital may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Skycity Entertainment and Sandon Capital

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

The idea behind Skycity Entertainment Group and Sandon Capital Investments 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.

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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .