Correlation Between Freeport McMoRan and Supermarket Income
Can any of the company-specific risk be diversified away by investing in both Freeport McMoRan and Supermarket Income 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 Freeport McMoRan and Supermarket Income into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Freeport McMoRan and Supermarket Income REIT, you can compare the effects of market volatilities on Freeport McMoRan and Supermarket Income 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 Freeport McMoRan with a short position of Supermarket Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Freeport McMoRan and Supermarket Income.
Diversification Opportunities for Freeport McMoRan and Supermarket Income
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Freeport and Supermarket is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Freeport McMoRan and Supermarket Income REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Supermarket Income REIT and Freeport McMoRan 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 Freeport McMoRan are associated (or correlated) with Supermarket Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Supermarket Income REIT has no effect on the direction of Freeport McMoRan i.e., Freeport McMoRan and Supermarket Income go up and down completely randomly.
Pair Corralation between Freeport McMoRan and Supermarket Income
Assuming the 90 days trading horizon Freeport McMoRan is expected to generate 1.42 times more return on investment than Supermarket Income. However, Freeport McMoRan is 1.42 times more volatile than Supermarket Income REIT. It trades about 0.01 of its potential returns per unit of risk. Supermarket Income REIT is currently generating about -0.04 per unit of risk. If you would invest 3,823 in Freeport McMoRan on September 24, 2024 and sell it today you would earn a total of 75.00 from holding Freeport McMoRan or generate 1.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Freeport McMoRan vs. Supermarket Income REIT
Performance |
| Timeline |
| Freeport McMoRan |
| Supermarket Income REIT |
Freeport McMoRan and Supermarket Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Freeport McMoRan and Supermarket Income
The main advantage of trading using opposite Freeport McMoRan and Supermarket Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Freeport McMoRan position performs unexpectedly, Supermarket Income 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 Supermarket Income will offset losses from the drop in Supermarket Income's long position.| Freeport McMoRan vs. Lowland Investment Co | Freeport McMoRan vs. Supermarket Income REIT | Freeport McMoRan vs. Aberdeen Diversified Income | Freeport McMoRan vs. Bankers Investment Trust |
| Supermarket Income vs. Finnair Oyj | Supermarket Income vs. Bisichi Mining PLC | Supermarket Income vs. Wheaton Precious Metals | Supermarket Income vs. Mindflair Plc |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |