Correlation Between Supercom and Artisan Partners

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Can any of the company-specific risk be diversified away by investing in both Supercom and Artisan Partners 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 Supercom and Artisan Partners into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Supercom and Artisan Partners Asset, you can compare the effects of market volatilities on Supercom and Artisan Partners 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 Supercom with a short position of Artisan Partners. Check out your portfolio center. Please also check ongoing floating volatility patterns of Supercom and Artisan Partners.

Diversification Opportunities for Supercom and Artisan Partners

-0.59
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Supercom and Artisan is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Supercom and Artisan Partners Asset in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Artisan Partners Asset and Supercom 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 Supercom are associated (or correlated) with Artisan Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Artisan Partners Asset has no effect on the direction of Supercom i.e., Supercom and Artisan Partners go up and down completely randomly.

Pair Corralation between Supercom and Artisan Partners

Given the investment horizon of 90 days Supercom is expected to generate 14.77 times more return on investment than Artisan Partners. However, Supercom is 14.77 times more volatile than Artisan Partners Asset. It trades about 0.45 of its potential returns per unit of risk. Artisan Partners Asset is currently generating about -0.07 per unit of risk. If you would invest  339.00  in Supercom on October 21, 2024 and sell it today you would earn a total of  1,003  from holding Supercom or generate 295.87% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Supercom  vs.  Artisan Partners Asset

 Performance 
       Timeline  
Supercom 

Risk-Adjusted Performance

19 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Supercom are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite somewhat fragile fundamental indicators, Supercom sustained solid returns over the last few months and may actually be approaching a breakup point.
Artisan Partners Asset 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Artisan Partners Asset has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Artisan Partners is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Supercom and Artisan Partners Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Supercom and Artisan Partners

The main advantage of trading using opposite Supercom and Artisan Partners positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Supercom position performs unexpectedly, Artisan Partners 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 Artisan Partners will offset losses from the drop in Artisan Partners' long position.
The idea behind Supercom and Artisan Partners Asset pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.

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