Correlation Between Supercom and Food Culture
Can any of the company-specific risk be diversified away by investing in both Supercom and Food Culture 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 Food Culture into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Supercom and Food Culture, you can compare the effects of market volatilities on Supercom and Food Culture 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 Food Culture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Supercom and Food Culture.
Diversification Opportunities for Supercom and Food Culture
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Supercom and Food is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Supercom and Food Culture in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Food Culture 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 Food Culture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Food Culture has no effect on the direction of Supercom i.e., Supercom and Food Culture go up and down completely randomly.
Pair Corralation between Supercom and Food Culture
Given the investment horizon of 90 days Supercom is expected to under-perform the Food Culture. But the stock apears to be less risky and, when comparing its historical volatility, Supercom is 36.42 times less risky than Food Culture. The stock trades about -0.14 of its potential returns per unit of risk. The Food Culture is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 2.80 in Food Culture on September 13, 2024 and sell it today you would earn a total of 22.20 from holding Food Culture or generate 792.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Supercom vs. Food Culture
Performance |
| Timeline |
| Supercom |
| Food Culture |
Supercom and Food Culture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Supercom and Food Culture
The main advantage of trading using opposite Supercom and Food Culture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Supercom position performs unexpectedly, Food Culture 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 Food Culture will offset losses from the drop in Food Culture's long position.| Supercom vs. Zedcor Inc | Supercom vs. SSC Security Services | Supercom vs. Blue Line Protection | Supercom vs. Guardforce AI Co |
| Food Culture vs. Paysafe | Food Culture vs. Diageo PLC ADR | Food Culture vs. Uber Technologies | Food Culture vs. Molson Coors Brewing |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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