Correlation Between Supermarket Income and Alternative Income
Can any of the company-specific risk be diversified away by investing in both Supermarket Income and Alternative Income 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 Alternative Income 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 Alternative Income REIT, you can compare the effects of market volatilities on Supermarket Income and Alternative Income 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 Alternative Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Supermarket Income and Alternative Income.
Diversification Opportunities for Supermarket Income and Alternative Income
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Supermarket and Alternative is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Supermarket Income REIT and Alternative Income REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alternative Income REIT 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 Alternative Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alternative Income REIT has no effect on the direction of Supermarket Income i.e., Supermarket Income and Alternative Income go up and down completely randomly.
Pair Corralation between Supermarket Income and Alternative Income
Assuming the 90 days trading horizon Supermarket Income REIT is expected to generate 0.55 times more return on investment than Alternative Income. However, Supermarket Income REIT is 1.82 times less risky than Alternative Income. It trades about 0.06 of its potential returns per unit of risk. Alternative Income REIT is currently generating about -0.09 per unit of risk. If you would invest 7,050 in Supermarket Income REIT on September 2, 2024 and sell it today you would earn a total of 80.00 from holding Supermarket Income REIT or generate 1.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Supermarket Income REIT vs. Alternative Income REIT
Performance |
| Timeline |
| Supermarket Income REIT |
| Alternative Income REIT |
Supermarket Income and Alternative Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Supermarket Income and Alternative Income
The main advantage of trading using opposite Supermarket Income and Alternative Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Supermarket Income position performs unexpectedly, Alternative Income 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 Alternative Income will offset losses from the drop in Alternative Income's long position.| Supermarket Income vs. Derwent London PLC | Supermarket Income vs. Workspace Group PLC | Supermarket Income vs. Diversified Energy | Supermarket Income vs. Thyssenkrupp AG ON |
| Alternative Income vs. Albion Technology General | Alternative Income vs. Allianz Technology Trust | Alternative Income vs. Eastman Chemical Co | Alternative Income vs. DXC Technology Co |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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