Correlation Between SupplyMe Capital and NCC Group
Can any of the company-specific risk be diversified away by investing in both SupplyMe Capital and NCC Group 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 NCC Group 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 NCC Group plc, you can compare the effects of market volatilities on SupplyMe Capital and NCC Group 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 NCC Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of SupplyMe Capital and NCC Group.
Diversification Opportunities for SupplyMe Capital and NCC Group
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SupplyMe and NCC is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding SupplyMe Capital PLC and NCC Group plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NCC Group plc 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 NCC Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NCC Group plc has no effect on the direction of SupplyMe Capital i.e., SupplyMe Capital and NCC Group go up and down completely randomly.
Pair Corralation between SupplyMe Capital and NCC Group
Assuming the 90 days trading horizon SupplyMe Capital PLC is expected to generate 5.01 times more return on investment than NCC Group. However, SupplyMe Capital is 5.01 times more volatile than NCC Group plc. It trades about 0.14 of its potential returns per unit of risk. NCC Group plc is currently generating about -0.09 per unit of risk. If you would invest 0.30 in SupplyMe Capital PLC on September 20, 2024 and sell it today you would earn a total of 0.07 from holding SupplyMe Capital PLC or generate 23.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
SupplyMe Capital PLC vs. NCC Group plc
Performance |
| Timeline |
| SupplyMe Capital PLC |
| NCC Group plc |
SupplyMe Capital and NCC Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SupplyMe Capital and NCC Group
The main advantage of trading using opposite SupplyMe Capital and NCC Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SupplyMe Capital position performs unexpectedly, NCC Group 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 NCC Group will offset losses from the drop in NCC Group's long position.| SupplyMe Capital vs. Premier Foods PLC | SupplyMe Capital vs. Ebro Foods | SupplyMe Capital vs. Roebuck Food Group | SupplyMe Capital vs. Sealed Air Corp |
| NCC Group vs. SupplyMe Capital PLC | NCC Group vs. Lloyds Banking Group | NCC Group vs. Premier African Minerals | NCC Group vs. SANTANDER UK 8 |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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