Correlation Between Auction Technology and SupplyMe Capital
Can any of the company-specific risk be diversified away by investing in both Auction Technology and SupplyMe Capital 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 SupplyMe Capital 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 SupplyMe Capital PLC, you can compare the effects of market volatilities on Auction Technology and SupplyMe Capital 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 SupplyMe Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Auction Technology and SupplyMe Capital.
Diversification Opportunities for Auction Technology and SupplyMe Capital
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Auction and SupplyMe is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Auction Technology Group and SupplyMe Capital PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SupplyMe Capital PLC 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 SupplyMe Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SupplyMe Capital PLC has no effect on the direction of Auction Technology i.e., Auction Technology and SupplyMe Capital go up and down completely randomly.
Pair Corralation between Auction Technology and SupplyMe Capital
Assuming the 90 days trading horizon Auction Technology is expected to generate 2.73 times less return on investment than SupplyMe Capital. But when comparing it to its historical volatility, Auction Technology Group is 2.82 times less risky than SupplyMe Capital. It trades about 0.17 of its potential returns per unit of risk. SupplyMe Capital PLC is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 0.30 in SupplyMe Capital PLC on September 1, 2024 and sell it today you would earn a total of 0.10 from holding SupplyMe Capital PLC or generate 33.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Auction Technology Group vs. SupplyMe Capital PLC
Performance |
| Timeline |
| Auction Technology |
| SupplyMe Capital PLC |
Auction Technology and SupplyMe Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Auction Technology and SupplyMe Capital
The main advantage of trading using opposite Auction Technology and SupplyMe Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Auction Technology position performs unexpectedly, SupplyMe Capital 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 SupplyMe Capital will offset losses from the drop in SupplyMe Capital's long position.| Auction Technology vs. SupplyMe Capital PLC | Auction Technology vs. Lloyds Banking Group | Auction Technology vs. Premier African Minerals | Auction Technology vs. SANTANDER UK 8 |
| SupplyMe Capital vs. Associated British Foods | SupplyMe Capital vs. Ecofin Global Utilities | SupplyMe Capital vs. Austevoll Seafood ASA | SupplyMe Capital vs. Spirent Communications 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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