Correlation Between MSA Safety and Supercom
Can any of the company-specific risk be diversified away by investing in both MSA Safety 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 MSA Safety and Supercom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MSA Safety and Supercom, you can compare the effects of market volatilities on MSA Safety 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 MSA Safety with a short position of Supercom. Check out your portfolio center. Please also check ongoing floating volatility patterns of MSA Safety and Supercom.
Diversification Opportunities for MSA Safety and Supercom
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between MSA and Supercom is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding MSA Safety and Supercom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Supercom and MSA Safety 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 MSA Safety 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 MSA Safety i.e., MSA Safety and Supercom go up and down completely randomly.
Pair Corralation between MSA Safety and Supercom
Considering the 90-day investment horizon MSA Safety is expected to generate 1.68 times less return on investment than Supercom. But when comparing it to its historical volatility, MSA Safety is 3.15 times less risky than Supercom. It trades about 0.2 of its potential returns per unit of risk. Supercom is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 340.00 in Supercom on August 28, 2024 and sell it today you would earn a total of 28.00 from holding Supercom or generate 8.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MSA Safety vs. Supercom
Performance |
| Timeline |
| MSA Safety |
| Supercom |
MSA Safety and Supercom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MSA Safety and Supercom
The main advantage of trading using opposite MSA Safety and Supercom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MSA Safety 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.| MSA Safety vs. Allegion PLC | MSA Safety vs. Resideo Technologies | MSA Safety vs. NL Industries | MSA Safety vs. Brady |
| 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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