Correlation Between BBB Foods and Supercom
Can any of the company-specific risk be diversified away by investing in both BBB Foods and Supercom 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 BBB Foods and Supercom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BBB Foods and Supercom, you can compare the effects of market volatilities on BBB Foods and Supercom 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 BBB Foods with a short position of Supercom. Check out your portfolio center. Please also check ongoing floating volatility patterns of BBB Foods and Supercom.
Diversification Opportunities for BBB Foods and Supercom
Average diversification
The 3 months correlation between BBB and Supercom is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding BBB Foods and Supercom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Supercom and BBB Foods 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 BBB Foods are associated (or correlated) with Supercom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Supercom has no effect on the direction of BBB Foods i.e., BBB Foods and Supercom go up and down completely randomly.
Pair Corralation between BBB Foods and Supercom
Given the investment horizon of 90 days BBB Foods is expected to under-perform the Supercom. But the stock apears to be less risky and, when comparing its historical volatility, BBB Foods is 1.3 times less risky than Supercom. The stock trades about -0.17 of its potential returns per unit of risk. The Supercom is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 309.00 in Supercom on September 3, 2024 and sell it today you would earn a total of 57.00 from holding Supercom or generate 18.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BBB Foods vs. Supercom
Performance |
| Timeline |
| BBB Foods |
| Supercom |
BBB Foods and Supercom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BBB Foods and Supercom
The main advantage of trading using opposite BBB Foods and Supercom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BBB Foods position performs unexpectedly, Supercom 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 Supercom will offset losses from the drop in Supercom's long position.| BBB Foods vs. NetSol Technologies | BBB Foods vs. Analog Devices | BBB Foods vs. FARO Technologies | BBB Foods vs. Getty Images Holdings |
| Supercom vs. Zedcor Inc | Supercom vs. SSC Security Services | Supercom vs. Blue Line Protection | Supercom vs. Guardforce AI Co |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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