Correlation Between Auction Technology and Supermarket Income
Can any of the company-specific risk be diversified away by investing in both Auction Technology 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 Auction Technology and Supermarket Income into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Auction Technology Group and Supermarket Income REIT, you can compare the effects of market volatilities on Auction Technology 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 Auction Technology with a short position of Supermarket Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Auction Technology and Supermarket Income.
Diversification Opportunities for Auction Technology and Supermarket Income
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Auction and Supermarket is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Auction Technology Group 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 Auction Technology 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 Auction Technology Group 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 Auction Technology i.e., Auction Technology and Supermarket Income go up and down completely randomly.
Pair Corralation between Auction Technology and Supermarket Income
Assuming the 90 days trading horizon Auction Technology Group is expected to generate 2.32 times more return on investment than Supermarket Income. However, Auction Technology is 2.32 times more volatile than Supermarket Income REIT. It trades about 0.0 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 49,050 in Auction Technology Group on August 27, 2024 and sell it today you would lose (4,100) from holding Auction Technology Group or give up 8.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Auction Technology Group vs. Supermarket Income REIT
Performance |
| Timeline |
| Auction Technology |
| Supermarket Income REIT |
Auction Technology and Supermarket Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Auction Technology and Supermarket Income
The main advantage of trading using opposite Auction Technology and Supermarket Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Auction Technology 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.| Auction Technology vs. Uniper SE | Auction Technology vs. London Security Plc | Auction Technology vs. SURETRACK MON | Auction Technology vs. Ikigai Ventures |
| 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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