Correlation Between Supercom and 361448BC6

Can any of the company-specific risk be diversified away by investing in both Supercom and 361448BC6 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 361448BC6 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Supercom and GATX P 455, you can compare the effects of market volatilities on Supercom and 361448BC6 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 361448BC6. Check out your portfolio center. Please also check ongoing floating volatility patterns of Supercom and 361448BC6.

Diversification Opportunities for Supercom and 361448BC6

0.34

Correlation Coefficient

Supercom  361448BC6

Weak diversification

The 3 months correlation between Supercom and 361448BC6 is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Supercom and GATX P 455 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GATX P 455 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 361448BC6. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GATX P 455 has no effect on the direction of Supercom i.e., Supercom and 361448BC6 go up and down completely randomly.

Pair Corralation between Supercom and 361448BC6

Given the investment horizon of 90 days Supercom is expected to generate 8.07 times more return on investment than 361448BC6. However, Supercom is 8.07 times more volatile than GATX P 455. It trades about 0.1 of its potential returns per unit of risk. GATX P 455 is currently generating about -0.09 per unit of risk. If you would invest  288.00  in Supercom on September 2, 2024 and sell it today you would earn a total of  78.00  from holding Supercom or generate 27.08% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	56.25%
Values	Daily Returns

Supercom  vs.  GATX P 455

Supercom

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Supercom are ranked lower than 8 (%) 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.

GATX P 455

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GATX P 455 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 361448BC6 is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Supercom and 361448BC6

The main advantage of trading using opposite Supercom and 361448BC6 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Supercom position performs unexpectedly, 361448BC6 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 361448BC6 will offset losses from the drop in 361448BC6's long position.

The idea behind Supercom and GATX P 455 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.