Correlation Between Supermarket Income and Auction Technology
Can any of the company-specific risk be diversified away by investing in both Supermarket Income and Auction Technology 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 Auction Technology 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 Auction Technology Group, you can compare the effects of market volatilities on Supermarket Income and Auction Technology 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 Auction Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Supermarket Income and Auction Technology.
Diversification Opportunities for Supermarket Income and Auction Technology
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Supermarket and Auction is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Supermarket Income REIT and Auction Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Auction Technology 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 Auction Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Auction Technology has no effect on the direction of Supermarket Income i.e., Supermarket Income and Auction Technology go up and down completely randomly.
Pair Corralation between Supermarket Income and Auction Technology
Assuming the 90 days trading horizon Supermarket Income REIT is expected to under-perform the Auction Technology. But the stock apears to be less risky and, when comparing its historical volatility, Supermarket Income REIT is 3.14 times less risky than Auction Technology. The stock trades about -0.07 of its potential returns per unit of risk. The Auction Technology Group is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 42,000 in Auction Technology Group on August 30, 2024 and sell it today you would earn a total of 8,700 from holding Auction Technology Group or generate 20.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Supermarket Income REIT vs. Auction Technology Group
Performance |
| Timeline |
| Supermarket Income REIT |
| Auction Technology |
Supermarket Income and Auction Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Supermarket Income and Auction Technology
The main advantage of trading using opposite Supermarket Income and Auction Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Supermarket Income position performs unexpectedly, Auction Technology 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 Auction Technology will offset losses from the drop in Auction Technology's long position.| Supermarket Income vs. Fevertree Drinks Plc | Supermarket Income vs. Check Point Software | Supermarket Income vs. International Biotechnology Trust | Supermarket Income vs. Pfeiffer Vacuum Technology |
| Auction Technology vs. Samsung Electronics Co | Auction Technology vs. Samsung Electronics Co | Auction Technology vs. Hyundai Motor | Auction Technology vs. Toyota Motor 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |