Correlation Between Supermarket Income and Amaroq Minerals

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

By analyzing existing cross correlation between Supermarket Income REIT and Amaroq Minerals, you can compare the effects of market volatilities on Supermarket Income and Amaroq Minerals 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 Supermarket Income with a short position of Amaroq Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Supermarket Income and Amaroq Minerals.

Diversification Opportunities for Supermarket Income and Amaroq Minerals

-0.65

Correlation Coefficient

Supermarket Income  Amaroq Minerals

Excellent diversification

The 3 months correlation between Supermarket and Amaroq is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Supermarket Income REIT and Amaroq Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amaroq Minerals and Supermarket Income 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 Supermarket Income REIT are associated (or correlated) with Amaroq Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amaroq Minerals has no effect on the direction of Supermarket Income i.e., Supermarket Income and Amaroq Minerals go up and down completely randomly.

Pair Corralation between Supermarket Income and Amaroq Minerals

Assuming the 90 days trading horizon Supermarket Income REIT is expected to generate 0.6 times more return on investment than Amaroq Minerals. However, Supermarket Income REIT is 1.67 times less risky than Amaroq Minerals. It trades about 0.15 of its potential returns per unit of risk. Amaroq Minerals is currently generating about -0.03 per unit of risk. If you would invest  6,685  in Supermarket Income REIT on December 26, 2024 and sell it today you would earn a total of  865.00  from holding Supermarket Income REIT or generate 12.94% return on investment over 90 days.

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

Supermarket Income REIT  vs.  Amaroq Minerals

Supermarket Income REIT

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Supermarket Income REIT are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Supermarket Income unveiled solid returns over the last few months and may actually be approaching a breakup point.

Amaroq Minerals

Risk-Adjusted Performance

Very Weak

Over the last 90 days Amaroq Minerals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Amaroq Minerals is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Supermarket Income and Amaroq Minerals

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

The idea behind Supermarket Income REIT and Amaroq Minerals 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.