Correlation Between SupplyMe Capital and Overstock
Can any of the company-specific risk be diversified away by investing in both SupplyMe Capital and Overstock 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 SupplyMe Capital and Overstock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SupplyMe Capital PLC and Overstock, you can compare the effects of market volatilities on SupplyMe Capital and Overstock 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 SupplyMe Capital with a short position of Overstock. Check out your portfolio center. Please also check ongoing floating volatility patterns of SupplyMe Capital and Overstock.
Diversification Opportunities for SupplyMe Capital and Overstock
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SupplyMe and Overstock is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding SupplyMe Capital PLC and Overstock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Overstock and SupplyMe Capital 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 SupplyMe Capital PLC are associated (or correlated) with Overstock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Overstock has no effect on the direction of SupplyMe Capital i.e., SupplyMe Capital and Overstock go up and down completely randomly.
Pair Corralation between SupplyMe Capital and Overstock
Assuming the 90 days trading horizon SupplyMe Capital PLC is expected to under-perform the Overstock. In addition to that, SupplyMe Capital is 1.69 times more volatile than Overstock. It trades about -0.08 of its total potential returns per unit of risk. Overstock is currently generating about -0.1 per unit of volatility. If you would invest 1,534 in Overstock on September 1, 2024 and sell it today you would lose (924.00) from holding Overstock or give up 60.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.24% |
| Values | Daily Returns |
SupplyMe Capital PLC vs. Overstock
Performance |
| Timeline |
| SupplyMe Capital PLC |
| Overstock |
SupplyMe Capital and Overstock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SupplyMe Capital and Overstock
The main advantage of trading using opposite SupplyMe Capital and Overstock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SupplyMe Capital position performs unexpectedly, Overstock 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 Overstock will offset losses from the drop in Overstock's long position.| SupplyMe Capital vs. Associated British Foods | SupplyMe Capital vs. Ecofin Global Utilities | SupplyMe Capital vs. Austevoll Seafood ASA | SupplyMe Capital vs. Spirent Communications plc |
| Overstock vs. Jacquet Metal Service | Overstock vs. Fulcrum Metals PLC | Overstock vs. GreenX Metals | Overstock vs. Future Metals NL |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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