Correlation Between Supercomnet Technologies and MClean Technologies

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

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

Diversification Opportunities for Supercomnet Technologies and MClean Technologies

0.5

Correlation Coefficient

Supercomnet Technologies  MClean Technologies

Very weak diversification

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

Pair Corralation between Supercomnet Technologies and MClean Technologies

Assuming the 90 days trading horizon Supercomnet Technologies Bhd is expected to generate 0.41 times more return on investment than MClean Technologies. However, Supercomnet Technologies Bhd is 2.44 times less risky than MClean Technologies. It trades about 0.01 of its potential returns per unit of risk. MClean Technologies Bhd is currently generating about -0.08 per unit of risk. If you would invest  122.00  in Supercomnet Technologies Bhd on August 30, 2024 and sell it today you would earn a total of  0.00  from holding Supercomnet Technologies Bhd or generate 0.0% return on investment over 90 days.

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

Supercomnet Technologies Bhd  vs.  MClean Technologies Bhd

Supercomnet Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Supercomnet Technologies Bhd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Supercomnet Technologies is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

MClean Technologies Bhd

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MClean Technologies Bhd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in December 2024. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Supercomnet Technologies and MClean Technologies

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

The idea behind Supercomnet Technologies Bhd and MClean Technologies Bhd 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.