Correlation Between Supremex and Financial
Can any of the company-specific risk be diversified away by investing in both Supremex and Financial 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 Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Supremex and Financial 15 Split, you can compare the effects of market volatilities on Supremex and Financial 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 Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Supremex and Financial.
Diversification Opportunities for Supremex and Financial
Good diversification
The 3 months correlation between Supremex and Financial is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Supremex and Financial 15 Split in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Financial 15 Split 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 Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Financial 15 Split has no effect on the direction of Supremex i.e., Supremex and Financial go up and down completely randomly.
Pair Corralation between Supremex and Financial
Assuming the 90 days trading horizon Supremex is expected to under-perform the Financial. In addition to that, Supremex is 5.84 times more volatile than Financial 15 Split. It trades about -0.02 of its total potential returns per unit of risk. Financial 15 Split is currently generating about 0.33 per unit of volatility. If you would invest 1,037 in Financial 15 Split on August 31, 2024 and sell it today you would earn a total of 28.00 from holding Financial 15 Split or generate 2.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Supremex vs. Financial 15 Split
Performance |
| Timeline |
| Supremex |
| Financial 15 Split |
Supremex and Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Supremex and Financial
The main advantage of trading using opposite Supremex and Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Supremex position performs unexpectedly, Financial 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 Financial will offset losses from the drop in Financial's long position.| Supremex vs. High Liner Foods | Supremex vs. Tree Island Steel | Supremex vs. Chesswood Group Limited | Supremex vs. Hammond Power Solutions |
| Financial vs. iShares Canadian HYBrid | Financial vs. Brompton European Dividend | Financial vs. Solar Alliance Energy | Financial vs. PHN Multi Style All Cap |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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