Correlation Between SupplyMe Capital and Addtech
Can any of the company-specific risk be diversified away by investing in both SupplyMe Capital and Addtech 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 Addtech 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 Addtech, you can compare the effects of market volatilities on SupplyMe Capital and Addtech 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 Addtech. Check out your portfolio center. Please also check ongoing floating volatility patterns of SupplyMe Capital and Addtech.
Diversification Opportunities for SupplyMe Capital and Addtech
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SupplyMe and Addtech is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding SupplyMe Capital PLC and Addtech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Addtech 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 Addtech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Addtech has no effect on the direction of SupplyMe Capital i.e., SupplyMe Capital and Addtech go up and down completely randomly.
Pair Corralation between SupplyMe Capital and Addtech
Assuming the 90 days trading horizon SupplyMe Capital PLC is expected to under-perform the Addtech. In addition to that, SupplyMe Capital is 3.14 times more volatile than Addtech. It trades about -0.12 of its total potential returns per unit of risk. Addtech is currently generating about 0.07 per unit of volatility. If you would invest 24,806 in Addtech on August 26, 2024 and sell it today you would earn a total of 5,044 from holding Addtech or generate 20.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SupplyMe Capital PLC vs. Addtech
Performance |
| Timeline |
| SupplyMe Capital PLC |
| Addtech |
SupplyMe Capital and Addtech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SupplyMe Capital and Addtech
The main advantage of trading using opposite SupplyMe Capital and Addtech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SupplyMe Capital position performs unexpectedly, Addtech 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 Addtech will offset losses from the drop in Addtech's long position.| SupplyMe Capital vs. Addtech | SupplyMe Capital vs. Bisichi Mining PLC | SupplyMe Capital vs. Greenroc Mining PLC | SupplyMe Capital vs. Wheaton Precious Metals |
| Addtech vs. Young Cos Brewery | Addtech vs. Molson Coors Beverage | Addtech vs. Fevertree Drinks Plc | Addtech vs. Silvercorp Metals |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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