Correlation Between Sandon Capital and Coles

Can any of the company-specific risk be diversified away by investing in both Sandon Capital and Coles 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 Coles 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 Coles Group, you can compare the effects of market volatilities on Sandon Capital and Coles 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 Coles. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sandon Capital and Coles.

Diversification Opportunities for Sandon Capital and Coles

0.23

Correlation Coefficient

Sandon Capital  Coles

Modest diversification

The 3 months correlation between Sandon and Coles is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Sandon Capital Investments and Coles Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coles Group 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 Coles. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coles Group has no effect on the direction of Sandon Capital i.e., Sandon Capital and Coles go up and down completely randomly.

Pair Corralation between Sandon Capital and Coles

Assuming the 90 days trading horizon Sandon Capital is expected to generate 1.41 times less return on investment than Coles. In addition to that, Sandon Capital is 1.29 times more volatile than Coles Group. It trades about 0.05 of its total potential returns per unit of risk. Coles Group is currently generating about 0.1 per unit of volatility. If you would invest  1,851  in Coles Group on December 29, 2024 and sell it today you would earn a total of  119.00  from holding Coles Group or generate 6.43% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.31%
Values	Daily Returns

Sandon Capital Investments  vs.  Coles Group

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.

Coles Group

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Coles Group are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain essential indicators, Coles may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Sandon Capital and Coles

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

The idea behind Sandon Capital Investments and Coles Group 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.