Correlation Between MoneysupermarketCom and Supermarket Income
Can any of the company-specific risk be diversified away by investing in both MoneysupermarketCom 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 MoneysupermarketCom and Supermarket Income into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MoneysupermarketCom Group PLC and Supermarket Income REIT, you can compare the effects of market volatilities on MoneysupermarketCom 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 MoneysupermarketCom with a short position of Supermarket Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of MoneysupermarketCom and Supermarket Income.
Diversification Opportunities for MoneysupermarketCom and Supermarket Income
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between MoneysupermarketCom and Supermarket is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding MoneysupermarketCom Group PLC 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 MoneysupermarketCom 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 MoneysupermarketCom Group PLC 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 MoneysupermarketCom i.e., MoneysupermarketCom and Supermarket Income go up and down completely randomly.
Pair Corralation between MoneysupermarketCom and Supermarket Income
Assuming the 90 days trading horizon MoneysupermarketCom Group PLC is expected to generate 1.08 times more return on investment than Supermarket Income. However, MoneysupermarketCom is 1.08 times more volatile than Supermarket Income REIT. It trades about 0.0 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 21,496 in MoneysupermarketCom Group PLC on November 2, 2024 and sell it today you would lose (2,196) from holding MoneysupermarketCom Group PLC or give up 10.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MoneysupermarketCom Group PLC vs. Supermarket Income REIT
Performance |
| Timeline |
| MoneysupermarketCom |
| Supermarket Income REIT |
MoneysupermarketCom and Supermarket Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MoneysupermarketCom and Supermarket Income
The main advantage of trading using opposite MoneysupermarketCom and Supermarket Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MoneysupermarketCom 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.| MoneysupermarketCom vs. Kinnevik Investment AB | MoneysupermarketCom vs. OneSavings Bank PLC | MoneysupermarketCom vs. DXC Technology Co | MoneysupermarketCom vs. Bytes Technology |
| Supermarket Income vs. Cardinal Health | Supermarket Income vs. Sabien Technology Group | Supermarket Income vs. Ashtead Technology Holdings | Supermarket Income vs. DXC Technology 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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