Correlation Between Schroders Investment and Third Point

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

By analyzing existing cross correlation between Schroders Investment Trusts and Third Point Investors, you can compare the effects of market volatilities on Schroders Investment and Third Point 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 Schroders Investment with a short position of Third Point. Check out your portfolio center. Please also check ongoing floating volatility patterns of Schroders Investment and Third Point.

Diversification Opportunities for Schroders Investment and Third Point

-0.06

Correlation Coefficient

Schroders Investment  Third Point

Good diversification

The 3 months correlation between Schroders and Third is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Schroders Investment Trusts and Third Point Investors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Third Point Investors and Schroders Investment 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 Schroders Investment Trusts are associated (or correlated) with Third Point. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Third Point Investors has no effect on the direction of Schroders Investment i.e., Schroders Investment and Third Point go up and down completely randomly.

Pair Corralation between Schroders Investment and Third Point

Assuming the 90 days trading horizon Schroders Investment Trusts is expected to generate 0.74 times more return on investment than Third Point. However, Schroders Investment Trusts is 1.35 times less risky than Third Point. It trades about 0.3 of its potential returns per unit of risk. Third Point Investors is currently generating about 0.16 per unit of risk. If you would invest  42,000  in Schroders Investment Trusts on April 24, 2025 and sell it today you would earn a total of  7,900  from holding Schroders Investment Trusts or generate 18.81% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Schroders Investment Trusts  vs.  Third Point Investors

Schroders Investment

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Schroders Investment Trusts are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Schroders Investment exhibited solid returns over the last few months and may actually be approaching a breakup point.

Third Point Investors

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Third Point Investors are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Third Point unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Schroders Investment and Third Point

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

The idea behind Schroders Investment Trusts and Third Point Investors 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.