Correlation Between Ironbark Capital and Sandon Capital

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

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

Diversification Opportunities for Ironbark Capital and Sandon Capital

0.08

Correlation Coefficient

Ironbark Capital  Sandon Capital

Significant diversification

The 3 months correlation between Ironbark and Sandon is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Ironbark Capital 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 Ironbark 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 Ironbark Capital 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 Ironbark Capital i.e., Ironbark Capital and Sandon Capital go up and down completely randomly.

Pair Corralation between Ironbark Capital and Sandon Capital

Assuming the 90 days trading horizon Ironbark Capital is expected to under-perform the Sandon Capital. But the stock apears to be less risky and, when comparing its historical volatility, Ironbark Capital is 1.57 times less risky than Sandon Capital. The stock trades about -0.04 of its potential returns per unit of risk. The Sandon Capital Investments is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  76.00  in Sandon Capital Investments on December 22, 2024 and sell it today you would earn a total of  0.00  from holding Sandon Capital Investments or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	96.77%
Values	Daily Returns

Ironbark Capital  vs.  Sandon Capital Investments

Ironbark Capital

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ironbark Capital has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental indicators, Ironbark Capital is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Sandon Capital Inves

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sandon Capital Investments has generated negative risk-adjusted returns adding no value to investors with long positions. 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 Ironbark Capital and Sandon Capital

The main advantage of trading using opposite Ironbark Capital and Sandon Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ironbark Capital 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 Ironbark Capital 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.