Correlation Between Alfa Financial and Supermarket Income
Can any of the company-specific risk be diversified away by investing in both Alfa Financial 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 Alfa Financial and Supermarket Income into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alfa Financial Software and Supermarket Income REIT, you can compare the effects of market volatilities on Alfa Financial 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 Alfa Financial with a short position of Supermarket Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alfa Financial and Supermarket Income.
Diversification Opportunities for Alfa Financial and Supermarket Income
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Alfa and Supermarket is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Alfa Financial Software 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 Alfa Financial 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 Alfa Financial Software 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 Alfa Financial i.e., Alfa Financial and Supermarket Income go up and down completely randomly.
Pair Corralation between Alfa Financial and Supermarket Income
Assuming the 90 days trading horizon Alfa Financial Software is expected to generate 1.57 times more return on investment than Supermarket Income. However, Alfa Financial is 1.57 times more volatile than Supermarket Income REIT. It trades about 0.09 of its potential returns per unit of risk. Supermarket Income REIT is currently generating about -0.02 per unit of risk. If you would invest 14,704 in Alfa Financial Software on August 27, 2024 and sell it today you would earn a total of 7,096 from holding Alfa Financial Software or generate 48.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alfa Financial Software vs. Supermarket Income REIT
Performance |
| Timeline |
| Alfa Financial Software |
| Supermarket Income REIT |
Alfa Financial and Supermarket Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alfa Financial and Supermarket Income
The main advantage of trading using opposite Alfa Financial and Supermarket Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alfa Financial 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.| Alfa Financial vs. Capital Drilling | Alfa Financial vs. Livermore Investments Group | Alfa Financial vs. Odfjell Drilling | Alfa Financial vs. BE Semiconductor Industries |
| Supermarket Income vs. Derwent London PLC | Supermarket Income vs. Hammerson PLC | Supermarket Income vs. Workspace Group PLC | Supermarket Income vs. Diversified Energy |
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 Stocks Directory module to find actively traded stocks across global markets.
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