Correlation Between Supermarket Income and Atari SAS
Can any of the company-specific risk be diversified away by investing in both Supermarket Income and Atari SAS 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 Atari SAS 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 Atari SAS, you can compare the effects of market volatilities on Supermarket Income and Atari SAS 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 Atari SAS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Supermarket Income and Atari SAS.
Diversification Opportunities for Supermarket Income and Atari SAS
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Supermarket and Atari is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Supermarket Income REIT and Atari SAS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atari SAS 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 Atari SAS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atari SAS has no effect on the direction of Supermarket Income i.e., Supermarket Income and Atari SAS go up and down completely randomly.
Pair Corralation between Supermarket Income and Atari SAS
Assuming the 90 days trading horizon Supermarket Income REIT is expected to generate 0.23 times more return on investment than Atari SAS. However, Supermarket Income REIT is 4.31 times less risky than Atari SAS. It trades about 0.35 of its potential returns per unit of risk. Atari SAS is currently generating about -0.12 per unit of risk. If you would invest 6,655 in Supermarket Income REIT on November 29, 2024 and sell it today you would earn a total of 505.00 from holding Supermarket Income REIT or generate 7.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Supermarket Income REIT vs. Atari SAS
Performance |
| Timeline |
| Supermarket Income REIT |
| Atari SAS |
Supermarket Income and Atari SAS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Supermarket Income and Atari SAS
The main advantage of trading using opposite Supermarket Income and Atari SAS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Supermarket Income position performs unexpectedly, Atari SAS 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 Atari SAS will offset losses from the drop in Atari SAS's long position.| Supermarket Income vs. Pets at Home | Supermarket Income vs. MTI Wireless Edge | Supermarket Income vs. Beazer Homes USA | Supermarket Income vs. Fortune Brands Home |
| Atari SAS vs. Home Depot | Atari SAS vs. Weiss Korea Opportunity | Atari SAS vs. River and Mercantile | Atari SAS vs. Chrysalis Investments |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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