Correlation Between Supermarket Income and Ion Beam
Can any of the company-specific risk be diversified away by investing in both Supermarket Income and Ion Beam 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 Supermarket Income and Ion Beam into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Supermarket Income REIT and Ion Beam Applications, you can compare the effects of market volatilities on Supermarket Income and Ion Beam 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 Supermarket Income with a short position of Ion Beam. Check out your portfolio center. Please also check ongoing floating volatility patterns of Supermarket Income and Ion Beam.
Diversification Opportunities for Supermarket Income and Ion Beam
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Supermarket and Ion is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Supermarket Income REIT and Ion Beam Applications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ion Beam Applications and Supermarket Income 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 Supermarket Income REIT are associated (or correlated) with Ion Beam. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ion Beam Applications has no effect on the direction of Supermarket Income i.e., Supermarket Income and Ion Beam go up and down completely randomly.
Pair Corralation between Supermarket Income and Ion Beam
Assuming the 90 days trading horizon Supermarket Income is expected to generate 2.85 times less return on investment than Ion Beam. But when comparing it to its historical volatility, Supermarket Income REIT is 2.73 times less risky than Ion Beam. It trades about 0.03 of its potential returns per unit of risk. Ion Beam Applications is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,350 in Ion Beam Applications on September 12, 2024 and sell it today you would earn a total of 12.00 from holding Ion Beam Applications or generate 0.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Supermarket Income REIT vs. Ion Beam Applications
Performance |
| Timeline |
| Supermarket Income REIT |
| Ion Beam Applications |
Supermarket Income and Ion Beam Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Supermarket Income and Ion Beam
The main advantage of trading using opposite Supermarket Income and Ion Beam positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Supermarket Income position performs unexpectedly, Ion Beam 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 Ion Beam will offset losses from the drop in Ion Beam's long position.| Supermarket Income vs. Hammerson PLC | Supermarket Income vs. Neometals | Supermarket Income vs. Coor Service Management | Supermarket Income vs. Fidelity Sustainable USD |
| Ion Beam vs. Cars Inc | Ion Beam vs. Finnair Oyj | Ion Beam vs. Blackrock World Mining | Ion Beam vs. Sealed Air Corp |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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