Correlation Between Herald Investment and SupplyMe Capital

Can any of the company-specific risk be diversified away by investing in both Herald Investment and SupplyMe Capital 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 Herald Investment and SupplyMe Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Herald Investment Trust and SupplyMe Capital PLC, you can compare the effects of market volatilities on Herald Investment and SupplyMe Capital 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 Herald Investment with a short position of SupplyMe Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Herald Investment and SupplyMe Capital.

Diversification Opportunities for Herald Investment and SupplyMe Capital

-0.41

Correlation Coefficient

Herald Investment  SupplyMe Capital

Very good diversification

The 3 months correlation between Herald and SupplyMe is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Herald Investment Trust and SupplyMe Capital PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SupplyMe Capital PLC and Herald Investment 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 Herald Investment Trust are associated (or correlated) with SupplyMe Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SupplyMe Capital PLC has no effect on the direction of Herald Investment i.e., Herald Investment and SupplyMe Capital go up and down completely randomly.

Pair Corralation between Herald Investment and SupplyMe Capital

Assuming the 90 days trading horizon Herald Investment Trust is expected to generate 0.07 times more return on investment than SupplyMe Capital. However, Herald Investment Trust is 14.26 times less risky than SupplyMe Capital. It trades about 0.31 of its potential returns per unit of risk. SupplyMe Capital PLC is currently generating about -0.02 per unit of risk. If you would invest  205,500  in Herald Investment Trust on September 12, 2024 and sell it today you would earn a total of  39,500  from holding Herald Investment Trust or generate 19.22% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Herald Investment Trust  vs.  SupplyMe Capital PLC

Herald Investment Trust

Risk-Adjusted Performance

24 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Herald Investment Trust are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Herald Investment exhibited solid returns over the last few months and may actually be approaching a breakup point.

SupplyMe Capital PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SupplyMe Capital PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Herald Investment and SupplyMe Capital

The main advantage of trading using opposite Herald Investment and SupplyMe Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Herald Investment position performs unexpectedly, SupplyMe Capital 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 SupplyMe Capital will offset losses from the drop in SupplyMe Capital's long position.

The idea behind Herald Investment Trust and SupplyMe Capital PLC pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.