Correlation Between Global Health and Sandon Capital

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

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

Diversification Opportunities for Global Health and Sandon Capital

0.6

Correlation Coefficient

Global Health  Sandon Capital

Poor diversification

The 3 months correlation between Global and Sandon is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Global Health 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 Global Health 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 Global Health 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 Global Health i.e., Global Health and Sandon Capital go up and down completely randomly.

Pair Corralation between Global Health and Sandon Capital

Assuming the 90 days trading horizon Global Health is expected to under-perform the Sandon Capital. In addition to that, Global Health is 3.6 times more volatile than Sandon Capital Investments. It trades about -0.05 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  76.00  in Sandon Capital Investments on December 30, 2024 and sell it today you would earn a total of  3.00  from holding Sandon Capital Investments or generate 3.95% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	96.88%
Values	Daily Returns

Global Health  vs.  Sandon Capital Investments

Global Health

Risk-Adjusted Performance

Very Weak

Over the last 90 days Global Health has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Sandon Capital Inves

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Sandon Capital Investments are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable fundamental indicators, Sandon Capital is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Global Health and Sandon Capital

The main advantage of trading using opposite Global Health and Sandon Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Health 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 Global Health 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.

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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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.