Correlation Between BH Macro and SupplyMe Capital

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

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

Diversification Opportunities for BH Macro and SupplyMe Capital

-0.33

Correlation Coefficient

BH Macro  SupplyMe Capital

Very good diversification

The 3 months correlation between BHMU and SupplyMe is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding BH Macro Limited and SupplyMe Capital PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SupplyMe Capital PLC and BH Macro 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 BH Macro Limited are associated (or correlated) with SupplyMe Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SupplyMe Capital PLC has no effect on the direction of BH Macro i.e., BH Macro and SupplyMe Capital go up and down completely randomly.

Pair Corralation between BH Macro and SupplyMe Capital

Assuming the 90 days trading horizon BH Macro Limited is expected to generate 0.14 times more return on investment than SupplyMe Capital. However, BH Macro Limited is 7.1 times less risky than SupplyMe Capital. It trades about 0.06 of its potential returns per unit of risk. SupplyMe Capital PLC is currently generating about -0.1 per unit of risk. If you would invest  359.00  in BH Macro Limited on September 4, 2024 and sell it today you would earn a total of  59.00  from holding BH Macro Limited or generate 16.43% return on investment over 90 days.

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

BH Macro Limited  vs.  SupplyMe Capital PLC

BH Macro Limited

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BH Macro Limited are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, BH Macro may actually be approaching a critical reversion point that can send shares even higher in January 2025.

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 uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with BH Macro and SupplyMe Capital

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

The idea behind BH Macro Limited and SupplyMe Capital PLC 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.