Correlation Between Winpak and Supremex
Can any of the company-specific risk be diversified away by investing in both Winpak and Supremex 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 Winpak and Supremex into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Winpak and Supremex, you can compare the effects of market volatilities on Winpak and Supremex 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 Winpak with a short position of Supremex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Winpak and Supremex.
Diversification Opportunities for Winpak and Supremex
Good diversification
The 3 months correlation between Winpak and Supremex is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Winpak and Supremex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Supremex and Winpak 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 Winpak are associated (or correlated) with Supremex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Supremex has no effect on the direction of Winpak i.e., Winpak and Supremex go up and down completely randomly.
Pair Corralation between Winpak and Supremex
Assuming the 90 days trading horizon Winpak is expected to under-perform the Supremex. In addition to that, Winpak is 1.42 times more volatile than Supremex. It trades about -0.13 of its total potential returns per unit of risk. Supremex is currently generating about -0.17 per unit of volatility. If you would invest 400.00 in Supremex on September 25, 2024 and sell it today you would lose (16.00) from holding Supremex or give up 4.0% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 95.45% |
Values | Daily Returns |
Winpak vs. Supremex
Performance |
Timeline |
Winpak |
Supremex |
Winpak and Supremex Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Winpak and Supremex
The main advantage of trading using opposite Winpak and Supremex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Winpak position performs unexpectedly, Supremex 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 Supremex will offset losses from the drop in Supremex's long position.Winpak vs. Bausch Health Companies | Winpak vs. Quipt Home Medical | Winpak vs. NeXGold Mining Corp | Winpak vs. WELL Health Technologies |
Supremex vs. Quebecor | Supremex vs. Winpak | Supremex vs. Restaurant Brands International | Supremex vs. ATCO |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Other Complementary Tools
Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |