Correlation Between Fair Oaks and Supermarket Income
Can any of the company-specific risk be diversified away by investing in both Fair Oaks 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 Fair Oaks and Supermarket Income into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fair Oaks Income and Supermarket Income REIT, you can compare the effects of market volatilities on Fair Oaks 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 Fair Oaks with a short position of Supermarket Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fair Oaks and Supermarket Income.
Diversification Opportunities for Fair Oaks and Supermarket Income
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fair and Supermarket is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Fair Oaks Income 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 Fair Oaks 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 Fair Oaks Income 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 Fair Oaks i.e., Fair Oaks and Supermarket Income go up and down completely randomly.
Pair Corralation between Fair Oaks and Supermarket Income
Assuming the 90 days trading horizon Fair Oaks Income is expected to generate 0.44 times more return on investment than Supermarket Income. However, Fair Oaks Income is 2.27 times less risky than Supermarket Income. It trades about 0.09 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 42.00 in Fair Oaks Income on September 5, 2024 and sell it today you would earn a total of 15.00 from holding Fair Oaks Income or generate 35.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Fair Oaks Income vs. Supermarket Income REIT
Performance |
| Timeline |
| Fair Oaks Income |
| Supermarket Income REIT |
Fair Oaks and Supermarket Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fair Oaks and Supermarket Income
The main advantage of trading using opposite Fair Oaks and Supermarket Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fair Oaks 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.| Fair Oaks vs. Toyota Motor Corp | Fair Oaks vs. SoftBank Group Corp | Fair Oaks vs. OTP Bank Nyrt | Fair Oaks vs. Las Vegas Sands |
| Supermarket Income vs. Fair Oaks Income | Supermarket Income vs. Worldwide Healthcare Trust | Supermarket Income vs. HCA Healthcare | Supermarket Income vs. Eco Animal Health |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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