Correlation Between Supercom and 456837AQ6

Can any of the company-specific risk be diversified away by investing in both Supercom and 456837AQ6 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 456837AQ6 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Supercom and ING GROEP NV, you can compare the effects of market volatilities on Supercom and 456837AQ6 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 456837AQ6. Check out your portfolio center. Please also check ongoing floating volatility patterns of Supercom and 456837AQ6.

Diversification Opportunities for Supercom and 456837AQ6

0.24

Correlation Coefficient

Supercom  456837AQ6

Modest diversification

The 3 months correlation between Supercom and 456837AQ6 is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Supercom and ING GROEP NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ING GROEP NV 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 456837AQ6. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ING GROEP NV has no effect on the direction of Supercom i.e., Supercom and 456837AQ6 go up and down completely randomly.

Pair Corralation between Supercom and 456837AQ6

Given the investment horizon of 90 days Supercom is expected to generate 16.87 times more return on investment than 456837AQ6. However, Supercom is 16.87 times more volatile than ING GROEP NV. It trades about 0.03 of its potential returns per unit of risk. ING GROEP NV is currently generating about -0.28 per unit of risk. If you would invest  376.00  in Supercom on September 29, 2024 and sell it today you would earn a total of  8.00  from holding Supercom or generate 2.13% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	88.89%
Values	Daily Returns

Supercom  vs.  ING GROEP NV

Supercom

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Supercom are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat fragile fundamental indicators, Supercom may actually be approaching a critical reversion point that can send shares even higher in January 2025.

ING GROEP NV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ING GROEP NV has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 456837AQ6 is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Supercom and 456837AQ6

The main advantage of trading using opposite Supercom and 456837AQ6 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Supercom position performs unexpectedly, 456837AQ6 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 456837AQ6 will offset losses from the drop in 456837AQ6's long position.

The idea behind Supercom and ING GROEP NV 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.