Correlation Between Supremex and Eguana Technologies
Can any of the company-specific risk be diversified away by investing in both Supremex and Eguana Technologies 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 Supremex and Eguana Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Supremex and Eguana Technologies, you can compare the effects of market volatilities on Supremex and Eguana Technologies 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 Supremex with a short position of Eguana Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Supremex and Eguana Technologies.
Diversification Opportunities for Supremex and Eguana Technologies
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Supremex and Eguana is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Supremex and Eguana Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eguana Technologies and Supremex 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 Supremex are associated (or correlated) with Eguana Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eguana Technologies has no effect on the direction of Supremex i.e., Supremex and Eguana Technologies go up and down completely randomly.
Pair Corralation between Supremex and Eguana Technologies
Assuming the 90 days trading horizon Supremex is expected to generate 17.69 times less return on investment than Eguana Technologies. But when comparing it to its historical volatility, Supremex is 8.15 times less risky than Eguana Technologies. It trades about 0.03 of its potential returns per unit of risk. Eguana Technologies is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 3.00 in Eguana Technologies on September 2, 2024 and sell it today you would lose (2.00) from holding Eguana Technologies or give up 66.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Supremex vs. Eguana Technologies
Performance |
| Timeline |
| Supremex |
| Eguana Technologies |
Supremex and Eguana Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Supremex and Eguana Technologies
The main advantage of trading using opposite Supremex and Eguana Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Supremex position performs unexpectedly, Eguana Technologies 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 Eguana Technologies will offset losses from the drop in Eguana Technologies' long position.| Supremex vs. K Bro Linen | Supremex vs. The Keg Royalties | Supremex vs. Pollard Banknote Limited | Supremex vs. SIR Royalty Income |
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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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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