Correlation Between SupplyMe Capital and Baker Steel
Can any of the company-specific risk be diversified away by investing in both SupplyMe Capital and Baker Steel 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 Baker Steel 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 Baker Steel Resources, you can compare the effects of market volatilities on SupplyMe Capital and Baker Steel 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 Baker Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of SupplyMe Capital and Baker Steel.
Diversification Opportunities for SupplyMe Capital and Baker Steel
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between SupplyMe and Baker is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding SupplyMe Capital PLC and Baker Steel Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baker Steel Resources 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 Baker Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baker Steel Resources has no effect on the direction of SupplyMe Capital i.e., SupplyMe Capital and Baker Steel go up and down completely randomly.
Pair Corralation between SupplyMe Capital and Baker Steel
Assuming the 90 days trading horizon SupplyMe Capital PLC is expected to under-perform the Baker Steel. In addition to that, SupplyMe Capital is 2.62 times more volatile than Baker Steel Resources. It trades about -0.22 of its total potential returns per unit of risk. Baker Steel Resources is currently generating about 0.05 per unit of volatility. If you would invest 5,700 in Baker Steel Resources on October 24, 2024 and sell it today you would earn a total of 100.00 from holding Baker Steel Resources or generate 1.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SupplyMe Capital PLC vs. Baker Steel Resources
Performance |
| Timeline |
| SupplyMe Capital PLC |
| Baker Steel Resources |
SupplyMe Capital and Baker Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SupplyMe Capital and Baker Steel
The main advantage of trading using opposite SupplyMe Capital and Baker Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SupplyMe Capital position performs unexpectedly, Baker Steel 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 Baker Steel will offset losses from the drop in Baker Steel's long position.| SupplyMe Capital vs. Ecofin Global Utilities | SupplyMe Capital vs. URU Metals | SupplyMe Capital vs. European Metals Holdings | SupplyMe Capital vs. Rheinmetall AG |
| Baker Steel vs. Spire Healthcare Group | Baker Steel vs. Induction Healthcare Group | Baker Steel vs. Jupiter Fund Management | Baker Steel vs. Waste Management |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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