Correlation Between Analog Devices and Supercom
Can any of the company-specific risk be diversified away by investing in both Analog Devices and Supercom 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 Analog Devices and Supercom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Analog Devices and Supercom, you can compare the effects of market volatilities on Analog Devices and Supercom 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 Analog Devices with a short position of Supercom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Analog Devices and Supercom.
Diversification Opportunities for Analog Devices and Supercom
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Analog and Supercom is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Analog Devices and Supercom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Supercom and Analog Devices 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 Analog Devices are associated (or correlated) with Supercom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Supercom has no effect on the direction of Analog Devices i.e., Analog Devices and Supercom go up and down completely randomly.
Pair Corralation between Analog Devices and Supercom
Considering the 90-day investment horizon Analog Devices is expected to generate 0.19 times more return on investment than Supercom. However, Analog Devices is 5.14 times less risky than Supercom. It trades about 0.04 of its potential returns per unit of risk. Supercom is currently generating about -0.02 per unit of risk. If you would invest 16,188 in Analog Devices on August 31, 2024 and sell it today you would earn a total of 5,617 from holding Analog Devices or generate 34.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Analog Devices vs. Supercom
Performance |
| Timeline |
| Analog Devices |
| Supercom |
Analog Devices and Supercom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Analog Devices and Supercom
The main advantage of trading using opposite Analog Devices and Supercom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Analog Devices position performs unexpectedly, Supercom 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 Supercom will offset losses from the drop in Supercom's long position.| Analog Devices vs. MACOM Technology Solutions | Analog Devices vs. FormFactor | Analog Devices vs. MaxLinear | Analog Devices vs. nLIGHT Inc |
| Supercom vs. Zedcor Inc | Supercom vs. SSC Security Services | Supercom vs. Blue Line Protection | Supercom vs. Guardforce AI Co |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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