Correlation Between Supermarket Income and Assura PLC
Can any of the company-specific risk be diversified away by investing in both Supermarket Income and Assura PLC 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 Assura PLC 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 Assura PLC, you can compare the effects of market volatilities on Supermarket Income and Assura PLC 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 Assura PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Supermarket Income and Assura PLC.
Diversification Opportunities for Supermarket Income and Assura PLC
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Supermarket and Assura is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Supermarket Income REIT and Assura PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Assura PLC 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 Assura PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Assura PLC has no effect on the direction of Supermarket Income i.e., Supermarket Income and Assura PLC go up and down completely randomly.
Pair Corralation between Supermarket Income and Assura PLC
Assuming the 90 days trading horizon Supermarket Income REIT is expected to generate 0.7 times more return on investment than Assura PLC. However, Supermarket Income REIT is 1.42 times less risky than Assura PLC. It trades about 0.07 of its potential returns per unit of risk. Assura PLC is currently generating about -0.05 per unit of risk. If you would invest 7,040 in Supermarket Income REIT on September 1, 2024 and sell it today you would earn a total of 90.00 from holding Supermarket Income REIT or generate 1.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Supermarket Income REIT vs. Assura PLC
Performance |
| Timeline |
| Supermarket Income REIT |
| Assura PLC |
Supermarket Income and Assura PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Supermarket Income and Assura PLC
The main advantage of trading using opposite Supermarket Income and Assura PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Supermarket Income position performs unexpectedly, Assura PLC 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 Assura PLC will offset losses from the drop in Assura PLC's long position.| Supermarket Income vs. Infrastrutture Wireless Italiane | Supermarket Income vs. Southwest Airlines Co | Supermarket Income vs. Indutrade AB | Supermarket Income vs. Greenroc Mining PLC |
| Assura PLC vs. Lowland Investment Co | Assura PLC vs. New Residential Investment | Assura PLC vs. Schroders Investment Trusts | Assura PLC vs. Smithson Investment Trust |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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