Correlation Between Supercom and Lai Sun
Can any of the company-specific risk be diversified away by investing in both Supercom and Lai Sun 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 Lai Sun into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Supercom and Lai Sun Garment, you can compare the effects of market volatilities on Supercom and Lai Sun 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 Lai Sun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Supercom and Lai Sun.
Diversification Opportunities for Supercom and Lai Sun
Modest diversification
The 3 months correlation between Supercom and Lai is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Supercom and Lai Sun Garment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lai Sun Garment 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 Lai Sun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lai Sun Garment has no effect on the direction of Supercom i.e., Supercom and Lai Sun go up and down completely randomly.
Pair Corralation between Supercom and Lai Sun
Given the investment horizon of 90 days Supercom is expected to under-perform the Lai Sun. In addition to that, Supercom is 3.98 times more volatile than Lai Sun Garment. It trades about -0.18 of its total potential returns per unit of risk. Lai Sun Garment is currently generating about -0.21 per unit of volatility. If you would invest 8.35 in Lai Sun Garment on September 12, 2024 and sell it today you would lose (0.35) from holding Lai Sun Garment or give up 4.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Supercom vs. Lai Sun Garment
Performance |
| Timeline |
| Supercom |
| Lai Sun Garment |
Supercom and Lai Sun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Supercom and Lai Sun
The main advantage of trading using opposite Supercom and Lai Sun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Supercom position performs unexpectedly, Lai Sun 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 Lai Sun will offset losses from the drop in Lai Sun's long position.| Supercom vs. Zedcor Inc | Supercom vs. SSC Security Services | Supercom vs. Blue Line Protection | Supercom vs. Guardforce AI Co |
| Lai Sun vs. Summit Materials | Lai Sun vs. Direct Line Insurance | Lai Sun vs. Kinsale Capital Group | Lai Sun vs. Highway Holdings 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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