Correlation Between Supremex and CCL Industries
Can any of the company-specific risk be diversified away by investing in both Supremex and CCL Industries 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 Supremex and CCL Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Supremex and CCL Industries, you can compare the effects of market volatilities on Supremex and CCL Industries 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 Supremex with a short position of CCL Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Supremex and CCL Industries.
Diversification Opportunities for Supremex and CCL Industries
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Supremex and CCL is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Supremex and CCL Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CCL Industries and Supremex 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 Supremex are associated (or correlated) with CCL Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CCL Industries has no effect on the direction of Supremex i.e., Supremex and CCL Industries go up and down completely randomly.
Pair Corralation between Supremex and CCL Industries
Assuming the 90 days trading horizon Supremex is expected to generate 1.57 times more return on investment than CCL Industries. However, Supremex is 1.57 times more volatile than CCL Industries. It trades about -0.01 of its potential returns per unit of risk. CCL Industries is currently generating about -0.12 per unit of risk. If you would invest 391.00 in Supremex on September 26, 2024 and sell it today you would lose (7.00) from holding Supremex or give up 1.79% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Supremex vs. CCL Industries
Performance |
Timeline |
Supremex |
CCL Industries |
Supremex and CCL Industries Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Supremex and CCL Industries
The main advantage of trading using opposite Supremex and CCL Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Supremex position performs unexpectedly, CCL Industries 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 CCL Industries will offset losses from the drop in CCL Industries' long position.Supremex vs. Quebecor | Supremex vs. Winpak | Supremex vs. Restaurant Brands International | Supremex vs. ATCO |
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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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