Correlation Between Bankers Investment and Supermarket Income
Can any of the company-specific risk be diversified away by investing in both Bankers Investment 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 Bankers Investment and Supermarket Income into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bankers Investment Trust and Supermarket Income REIT, you can compare the effects of market volatilities on Bankers Investment 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 Bankers Investment with a short position of Supermarket Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bankers Investment and Supermarket Income.
Diversification Opportunities for Bankers Investment and Supermarket Income
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bankers and Supermarket is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Bankers Investment Trust 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 Bankers Investment 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 Bankers Investment Trust 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 Bankers Investment i.e., Bankers Investment and Supermarket Income go up and down completely randomly.
Pair Corralation between Bankers Investment and Supermarket Income
Assuming the 90 days trading horizon Bankers Investment Trust is expected to generate 0.71 times more return on investment than Supermarket Income. However, Bankers Investment Trust is 1.4 times less risky than Supermarket Income. It trades about 0.02 of its potential returns per unit of risk. Supermarket Income REIT is currently generating about -0.04 per unit of risk. If you would invest 11,124 in Bankers Investment Trust on September 24, 2024 and sell it today you would earn a total of 276.00 from holding Bankers Investment Trust or generate 2.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bankers Investment Trust vs. Supermarket Income REIT
Performance |
| Timeline |
| Bankers Investment Trust |
| Supermarket Income REIT |
Bankers Investment and Supermarket Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bankers Investment and Supermarket Income
The main advantage of trading using opposite Bankers Investment and Supermarket Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bankers Investment 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.| Bankers Investment vs. Samsung Electronics Co | Bankers Investment vs. Samsung Electronics Co | Bankers Investment vs. Hyundai Motor | Bankers Investment vs. Toyota Motor Corp |
| Supermarket Income vs. Finnair Oyj | Supermarket Income vs. Bisichi Mining PLC | Supermarket Income vs. Wheaton Precious Metals | Supermarket Income vs. Mindflair 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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