Correlation Between SupplyMe Capital and One Media

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

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

Diversification Opportunities for SupplyMe Capital and One Media

0.5

Correlation Coefficient

SupplyMe Capital  One Media

Very weak diversification

The 3 months correlation between SupplyMe and One is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding SupplyMe Capital PLC and One Media iP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on One Media iP and SupplyMe Capital 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 SupplyMe Capital PLC are associated (or correlated) with One Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of One Media iP has no effect on the direction of SupplyMe Capital i.e., SupplyMe Capital and One Media go up and down completely randomly.

Pair Corralation between SupplyMe Capital and One Media

Assuming the 90 days trading horizon SupplyMe Capital PLC is expected to generate 5.3 times more return on investment than One Media. However, SupplyMe Capital is 5.3 times more volatile than One Media iP. It trades about 0.01 of its potential returns per unit of risk. One Media iP is currently generating about -0.04 per unit of risk. If you would invest  0.70  in SupplyMe Capital PLC on September 23, 2024 and sell it today you would lose (0.32) from holding SupplyMe Capital PLC or give up 45.71% of portfolio value over 90 days.

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

SupplyMe Capital PLC  vs.  One Media iP

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 comparatively unsteady basic indicators, SupplyMe Capital may actually be approaching a critical reversion point that can send shares even higher in January 2025.

One Media iP

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days One Media iP has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with SupplyMe Capital and One Media

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

The idea behind SupplyMe Capital PLC and One Media iP 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.