Correlation Between Supercom and Global

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

By analyzing existing cross correlation between Supercom and Global Payments 415, you can compare the effects of market volatilities on Supercom and Global 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 Supercom with a short position of Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Supercom and Global.

Diversification Opportunities for Supercom and Global

-0.13

Correlation Coefficient

Supercom  Global

Good diversification

The 3 months correlation between Supercom and Global is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Supercom and Global Payments 415 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Payments 415 and Supercom 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 Supercom are associated (or correlated) with Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Payments 415 has no effect on the direction of Supercom i.e., Supercom and Global go up and down completely randomly.

Pair Corralation between Supercom and Global

Given the investment horizon of 90 days Supercom is expected to generate 3.19 times more return on investment than Global. However, Supercom is 3.19 times more volatile than Global Payments 415. It trades about 0.09 of its potential returns per unit of risk. Global Payments 415 is currently generating about -0.14 per unit of risk. If you would invest  288.00  in Supercom on August 31, 2024 and sell it today you would earn a total of  60.00  from holding Supercom or generate 20.83% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	85.71%
Values	Daily Returns

Supercom  vs.  Global Payments 415

Supercom

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Supercom are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat fragile fundamental indicators, Supercom sustained solid returns over the last few months and may actually be approaching a breakup point.

Global Payments 415

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Global Payments 415 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long term up-swing for Global Payments 415 investors.

Pair Trading with Supercom and Global

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

The idea behind Supercom and Global Payments 415 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.

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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.