Correlation Between Allient and Supercom
Can any of the company-specific risk be diversified away by investing in both Allient 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 Allient and Supercom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Allient and Supercom, you can compare the effects of market volatilities on Allient 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 Allient with a short position of Supercom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allient and Supercom.
Diversification Opportunities for Allient and Supercom
Modest diversification
The 3 months correlation between Allient and Supercom is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Allient and Supercom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Supercom and Allient 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 Allient 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 Allient i.e., Allient and Supercom go up and down completely randomly.
Pair Corralation between Allient and Supercom
Given the investment horizon of 90 days Allient is expected to generate 0.29 times more return on investment than Supercom. However, Allient is 3.42 times less risky than Supercom. It trades about 0.02 of its potential returns per unit of risk. Supercom is currently generating about -0.21 per unit of risk. If you would invest 2,562 in Allient on November 28, 2024 and sell it today you would earn a total of 6.00 from holding Allient or generate 0.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Allient vs. Supercom
Performance |
| Timeline |
| Allient |
| Supercom |
Allient and Supercom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allient and Supercom
The main advantage of trading using opposite Allient and Supercom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allient 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.The idea behind Allient and Supercom 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.| 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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