Correlation Between Supply@Me Capital and Overstock
Can any of the company-specific risk be diversified away by investing in both Supply@Me 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 Supply@Me 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 Supply@Me 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 Supply@Me Capital with a short position of Overstock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Supply@Me Capital and Overstock.
Diversification Opportunities for Supply@Me Capital and Overstock
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Supply@Me and Overstock is 0.71. 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 Supply@Me 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 Supply@Me Capital i.e., Supply@Me Capital and Overstock go up and down completely randomly.
Pair Corralation between Supply@Me Capital and Overstock
Assuming the 90 days trading horizon SupplyMe Capital PLC is expected to generate 2.94 times more return on investment than Overstock. However, Supply@Me Capital is 2.94 times more volatile than Overstock. It trades about -0.04 of its potential returns per unit of risk. Overstock is currently generating about -0.14 per unit of risk. If you would invest 0.40 in SupplyMe Capital PLC on August 30, 2024 and sell it today you would lose (0.07) from holding SupplyMe Capital PLC or give up 17.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SupplyMe Capital PLC vs. Overstock
Performance |
| Timeline |
| SupplyMe Capital PLC |
| Overstock |
Supply@Me Capital and Overstock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Supply@Me Capital and Overstock
The main advantage of trading using opposite Supply@Me Capital and Overstock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Supply@Me 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.| Supply@Me Capital vs. International Biotechnology Trust | Supply@Me Capital vs. Orient Telecoms | Supply@Me Capital vs. Cellnex Telecom SA | Supply@Me Capital vs. United Airlines Holdings |
| Overstock vs. Prosiebensat 1 Media | Overstock vs. Blackstone Loan Financing | Overstock vs. Zinc Media Group | Overstock vs. CleanTech Lithium plc |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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