Correlation Between Supercom and Collective Mining

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

By analyzing existing cross correlation between Supercom and Collective Mining, you can compare the effects of market volatilities on Supercom and Collective Mining 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 Supercom with a short position of Collective Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Supercom and Collective Mining.

Diversification Opportunities for Supercom and Collective Mining

-0.11

Correlation Coefficient

Supercom  Collective Mining

Good diversification

The 3 months correlation between Supercom and Collective is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Supercom and Collective Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Collective Mining and Supercom 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 Supercom are associated (or correlated) with Collective Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Collective Mining has no effect on the direction of Supercom i.e., Supercom and Collective Mining go up and down completely randomly.

Pair Corralation between Supercom and Collective Mining

Given the investment horizon of 90 days Supercom is expected to generate 1.62 times more return on investment than Collective Mining. However, Supercom is 1.62 times more volatile than Collective Mining. It trades about 0.05 of its potential returns per unit of risk. Collective Mining is currently generating about 0.03 per unit of risk. If you would invest  309.00  in Supercom on September 13, 2024 and sell it today you would earn a total of  26.00  from holding Supercom or generate 8.41% return on investment over 90 days.

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

Supercom  vs.  Collective Mining

Supercom

Risk-Adjusted Performance

3 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Supercom are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat fragile fundamental indicators, Supercom sustained solid returns over the last few months and may actually be approaching a breakup point.

Collective Mining

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Collective Mining are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Collective Mining is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Supercom and Collective Mining

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

The idea behind Supercom and Collective Mining 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.

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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 .