Correlation Between Reckitt Benckiser and SupplyMe Capital
Can any of the company-specific risk be diversified away by investing in both Reckitt Benckiser 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 Reckitt Benckiser and SupplyMe Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Reckitt Benckiser Group and SupplyMe Capital PLC, you can compare the effects of market volatilities on Reckitt Benckiser 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 Reckitt Benckiser with a short position of SupplyMe Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Reckitt Benckiser and SupplyMe Capital.
Diversification Opportunities for Reckitt Benckiser and SupplyMe Capital
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Reckitt and SupplyMe is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Reckitt Benckiser Group 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 Reckitt Benckiser 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 Reckitt Benckiser Group 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 Reckitt Benckiser i.e., Reckitt Benckiser and SupplyMe Capital go up and down completely randomly.
Pair Corralation between Reckitt Benckiser and SupplyMe Capital
Assuming the 90 days trading horizon Reckitt Benckiser is expected to generate 42.08 times less return on investment than SupplyMe Capital. But when comparing it to its historical volatility, Reckitt Benckiser Group is 15.74 times less risky than SupplyMe Capital. It trades about 0.05 of its potential returns per unit of risk. SupplyMe Capital PLC is currently generating about 0.12 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 0.06 from holding SupplyMe Capital PLC or generate 20.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Reckitt Benckiser Group vs. SupplyMe Capital PLC
Performance |
| Timeline |
| Reckitt Benckiser |
| SupplyMe Capital PLC |
Reckitt Benckiser and SupplyMe Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Reckitt Benckiser and SupplyMe Capital
The main advantage of trading using opposite Reckitt Benckiser and SupplyMe Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Reckitt Benckiser 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.| Reckitt Benckiser vs. Fortune Brands Home | Reckitt Benckiser vs. Neometals | Reckitt Benckiser vs. McEwen Mining | Reckitt Benckiser vs. Zurich Insurance Group |
| 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Stocks Directory Find actively traded stocks across global markets | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |