Correlation Between Black Hills and Supercom
Can any of the company-specific risk be diversified away by investing in both Black Hills 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 Black Hills and Supercom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Black Hills and Supercom, you can compare the effects of market volatilities on Black Hills 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 Black Hills with a short position of Supercom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Black Hills and Supercom.
Diversification Opportunities for Black Hills and Supercom
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Black and Supercom is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Black Hills and Supercom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Supercom and Black Hills 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 Black Hills 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 Black Hills i.e., Black Hills and Supercom go up and down completely randomly.
Pair Corralation between Black Hills and Supercom
Considering the 90-day investment horizon Black Hills is expected to generate 1.07 times less return on investment than Supercom. But when comparing it to its historical volatility, Black Hills is 3.15 times less risky than Supercom. It trades about 0.27 of its potential returns per unit of risk. Supercom is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 341.00 in Supercom on August 31, 2024 and sell it today you would earn a total of 25.00 from holding Supercom or generate 7.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Black Hills vs. Supercom
Performance |
| Timeline |
| Black Hills |
| Supercom |
Black Hills and Supercom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Black Hills and Supercom
The main advantage of trading using opposite Black Hills and Supercom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Black Hills 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.| Black Hills vs. NorthWestern | Black Hills vs. Avista | Black Hills vs. Otter Tail | Black Hills vs. Companhia Paranaense de |
| 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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