Correlation Between Supermarket Income and NOW
Can any of the company-specific risk be diversified away by investing in both Supermarket Income and NOW 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 NOW 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 NOW Inc, you can compare the effects of market volatilities on Supermarket Income and NOW 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 NOW. Check out your portfolio center. Please also check ongoing floating volatility patterns of Supermarket Income and NOW.
Diversification Opportunities for Supermarket Income and NOW
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Supermarket and NOW is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Supermarket Income REIT and NOW Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NOW Inc 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 NOW. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NOW Inc has no effect on the direction of Supermarket Income i.e., Supermarket Income and NOW go up and down completely randomly.
Pair Corralation between Supermarket Income and NOW
Assuming the 90 days trading horizon Supermarket Income REIT is expected to under-perform the NOW. But the stock apears to be less risky and, when comparing its historical volatility, Supermarket Income REIT is 2.28 times less risky than NOW. The stock trades about -0.03 of its potential returns per unit of risk. The NOW Inc is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,115 in NOW Inc on September 14, 2024 and sell it today you would earn a total of 345.00 from holding NOW Inc or generate 30.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.81% |
| Values | Daily Returns |
Supermarket Income REIT vs. NOW Inc
Performance |
| Timeline |
| Supermarket Income REIT |
| NOW Inc |
Supermarket Income and NOW Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Supermarket Income and NOW
The main advantage of trading using opposite Supermarket Income and NOW positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Supermarket Income position performs unexpectedly, NOW 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 NOW will offset losses from the drop in NOW's long position.| Supermarket Income vs. Microchip Technology | Supermarket Income vs. Take Two Interactive Software | Supermarket Income vs. Ashtead Technology Holdings | Supermarket Income vs. Sabien Technology Group |
| NOW vs. Polar Capital Technology | NOW vs. GreenX Metals | NOW vs. CAP LEASE AVIATION | NOW vs. Silvercorp Metals |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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