Correlation Between SupplyMe Capital and Saga Plc
Can any of the company-specific risk be diversified away by investing in both SupplyMe Capital and Saga Plc 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 Saga Plc 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 Saga plc, you can compare the effects of market volatilities on SupplyMe Capital and Saga Plc 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 Saga Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of SupplyMe Capital and Saga Plc.
Diversification Opportunities for SupplyMe Capital and Saga Plc
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SupplyMe and Saga is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding SupplyMe Capital PLC and Saga plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saga 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 Saga Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saga plc has no effect on the direction of SupplyMe Capital i.e., SupplyMe Capital and Saga Plc go up and down completely randomly.
Pair Corralation between SupplyMe Capital and Saga Plc
Assuming the 90 days trading horizon SupplyMe Capital PLC is expected to generate 6.17 times more return on investment than Saga Plc. However, SupplyMe Capital is 6.17 times more volatile than Saga plc. It trades about 0.16 of its potential returns per unit of risk. Saga plc is currently generating about 0.04 per unit of risk. If you would invest 0.30 in SupplyMe Capital PLC on September 1, 2024 and sell it today you would earn a total of 0.10 from holding SupplyMe Capital PLC or generate 33.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
SupplyMe Capital PLC vs. Saga plc
Performance |
| Timeline |
| SupplyMe Capital PLC |
| Saga plc |
SupplyMe Capital and Saga Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SupplyMe Capital and Saga Plc
The main advantage of trading using opposite SupplyMe Capital and Saga Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SupplyMe Capital position performs unexpectedly, Saga Plc 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 Saga Plc will offset losses from the drop in Saga Plc'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 |
| Saga Plc vs. BE Semiconductor Industries | Saga Plc vs. Morgan Advanced Materials | Saga Plc vs. Compagnie Plastic Omnium | Saga Plc vs. Cars Inc |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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