Correlation Between Fair Oaks and SupplyMe Capital
Can any of the company-specific risk be diversified away by investing in both Fair Oaks 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 Fair Oaks and SupplyMe Capital 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 SupplyMe Capital PLC, you can compare the effects of market volatilities on Fair Oaks 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 Fair Oaks with a short position of SupplyMe Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fair Oaks and SupplyMe Capital.
Diversification Opportunities for Fair Oaks and SupplyMe Capital
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fair and SupplyMe is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Fair Oaks Income 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 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 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 Fair Oaks i.e., Fair Oaks and SupplyMe Capital go up and down completely randomly.
Pair Corralation between Fair Oaks and SupplyMe Capital
Assuming the 90 days trading horizon Fair Oaks is expected to generate 14.46 times less return on investment than SupplyMe Capital. But when comparing it to its historical volatility, Fair Oaks Income is 10.65 times less risky than SupplyMe Capital. It trades about 0.12 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 12, 2024 and sell it today you would earn a total of 0.11 from holding SupplyMe Capital PLC or generate 36.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fair Oaks Income vs. SupplyMe Capital PLC
Performance |
| Timeline |
| Fair Oaks Income |
| SupplyMe Capital PLC |
Fair Oaks and SupplyMe Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fair Oaks and SupplyMe Capital
The main advantage of trading using opposite Fair Oaks and SupplyMe Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fair Oaks 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.| Fair Oaks vs. Finnair Oyj | Fair Oaks vs. Premier Foods PLC | Fair Oaks vs. Monster Beverage Corp | Fair Oaks vs. Fevertree Drinks Plc |
| SupplyMe Capital vs. Hochschild Mining plc | SupplyMe Capital vs. AcadeMedia AB | SupplyMe Capital vs. Coor Service Management | SupplyMe Capital vs. Hollywood Bowl Group |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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