Correlation Between Supercom and United Homes
Can any of the company-specific risk be diversified away by investing in both Supercom and United Homes 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 United Homes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Supercom and United Homes Group, you can compare the effects of market volatilities on Supercom and United Homes 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 United Homes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Supercom and United Homes.
Diversification Opportunities for Supercom and United Homes
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Supercom and United is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Supercom and United Homes Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Homes Group 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 United Homes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Homes Group has no effect on the direction of Supercom i.e., Supercom and United Homes go up and down completely randomly.
Pair Corralation between Supercom and United Homes
Given the investment horizon of 90 days Supercom is expected to generate 0.59 times more return on investment than United Homes. However, Supercom is 1.69 times less risky than United Homes. It trades about -0.14 of its potential returns per unit of risk. United Homes Group is currently generating about -0.24 per unit of risk. If you would invest 375.00 in Supercom on September 13, 2024 and sell it today you would lose (42.00) from holding Supercom or give up 11.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Supercom vs. United Homes Group
Performance |
| Timeline |
| Supercom |
| United Homes Group |
Supercom and United Homes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Supercom and United Homes
The main advantage of trading using opposite Supercom and United Homes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Supercom position performs unexpectedly, United Homes 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 United Homes will offset losses from the drop in United Homes' long position.| Supercom vs. Zedcor Inc | Supercom vs. SSC Security Services | Supercom vs. Blue Line Protection | Supercom vs. Guardforce AI Co |
| United Homes vs. Boyd Gaming | United Homes vs. The Mosaic | United Homes vs. Avient Corp | United Homes vs. Meli Hotels International |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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