Correlation Between Supercom and Lakeside Holding
Can any of the company-specific risk be diversified away by investing in both Supercom and Lakeside Holding 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 Lakeside Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Supercom and Lakeside Holding Limited, you can compare the effects of market volatilities on Supercom and Lakeside Holding 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 Lakeside Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Supercom and Lakeside Holding.
Diversification Opportunities for Supercom and Lakeside Holding
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Supercom and Lakeside is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Supercom and Lakeside Holding Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lakeside Holding 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 Lakeside Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lakeside Holding has no effect on the direction of Supercom i.e., Supercom and Lakeside Holding go up and down completely randomly.
Pair Corralation between Supercom and Lakeside Holding
Given the investment horizon of 90 days Supercom is expected to generate 0.46 times more return on investment than Lakeside Holding. However, Supercom is 2.17 times less risky than Lakeside Holding. It trades about 0.08 of its potential returns per unit of risk. Lakeside Holding Limited is currently generating about 0.03 per unit of risk. If you would invest 287.00 in Supercom on September 12, 2024 and sell it today you would earn a total of 52.00 from holding Supercom or generate 18.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Supercom vs. Lakeside Holding Limited
Performance |
| Timeline |
| Supercom |
| Lakeside Holding |
Supercom and Lakeside Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Supercom and Lakeside Holding
The main advantage of trading using opposite Supercom and Lakeside Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Supercom position performs unexpectedly, Lakeside Holding 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 Lakeside Holding will offset losses from the drop in Lakeside Holding's long position.| Supercom vs. Zedcor Inc | Supercom vs. SSC Security Services | Supercom vs. Blue Line Protection | Supercom vs. Guardforce AI Co |
| Lakeside Holding vs. MGIC Investment Corp | Lakeside Holding vs. CapitaLand Investment Limited | Lakeside Holding vs. Fidus Investment Corp | Lakeside Holding vs. Guangdong Investment Limited |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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