Correlation Between Supermarket Income and Livermore Investments
Can any of the company-specific risk be diversified away by investing in both Supermarket Income and Livermore Investments 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 Livermore Investments 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 Livermore Investments Group, you can compare the effects of market volatilities on Supermarket Income and Livermore Investments 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 Livermore Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Supermarket Income and Livermore Investments.
Diversification Opportunities for Supermarket Income and Livermore Investments
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Supermarket and Livermore is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Supermarket Income REIT and Livermore Investments Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Livermore Investments 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 Livermore Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Livermore Investments has no effect on the direction of Supermarket Income i.e., Supermarket Income and Livermore Investments go up and down completely randomly.
Pair Corralation between Supermarket Income and Livermore Investments
Assuming the 90 days trading horizon Supermarket Income is expected to generate 4.93 times less return on investment than Livermore Investments. But when comparing it to its historical volatility, Supermarket Income REIT is 3.18 times less risky than Livermore Investments. It trades about 0.13 of its potential returns per unit of risk. Livermore Investments Group is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 4,660 in Livermore Investments Group on October 21, 2024 and sell it today you would earn a total of 715.00 from holding Livermore Investments Group or generate 15.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Supermarket Income REIT vs. Livermore Investments Group
Performance |
| Timeline |
| Supermarket Income REIT |
| Livermore Investments |
Supermarket Income and Livermore Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Supermarket Income and Livermore Investments
The main advantage of trading using opposite Supermarket Income and Livermore Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Supermarket Income position performs unexpectedly, Livermore Investments 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 Livermore Investments will offset losses from the drop in Livermore Investments' long position.| Supermarket Income vs. Vienna Insurance Group | Supermarket Income vs. Tyson Foods Cl | Supermarket Income vs. Compagnie Plastic Omnium | Supermarket Income vs. Ecclesiastical Insurance Office |
| Livermore Investments vs. Commerzbank AG | Livermore Investments vs. Sydbank | Livermore Investments vs. Sligro Food Group | Livermore Investments vs. Hilton Food Group |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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