Correlation Between Supermarket Income and Sirius Real

Can any of the company-specific risk be diversified away by investing in both Supermarket Income and Sirius Real 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 Sirius Real 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 Sirius Real Estate, you can compare the effects of market volatilities on Supermarket Income and Sirius Real 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 Sirius Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Supermarket Income and Sirius Real.

Diversification Opportunities for Supermarket Income and Sirius Real

0.87

Correlation Coefficient

Supermarket Income  Sirius Real

Very poor diversification

The 3 months correlation between Supermarket and Sirius is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Supermarket Income REIT and Sirius Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sirius Real Estate 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 Sirius Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sirius Real Estate has no effect on the direction of Supermarket Income i.e., Supermarket Income and Sirius Real go up and down completely randomly.

Pair Corralation between Supermarket Income and Sirius Real

Assuming the 90 days trading horizon Supermarket Income REIT is expected to generate 0.56 times more return on investment than Sirius Real. However, Supermarket Income REIT is 1.78 times less risky than Sirius Real. It trades about 0.0 of its potential returns per unit of risk. Sirius Real Estate is currently generating about -0.02 per unit of risk. If you would invest  7,020  in Supermarket Income REIT on September 5, 2024 and sell it today you would earn a total of  0.00  from holding Supermarket Income REIT or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	95.65%
Values	Daily Returns

Supermarket Income REIT  vs.  Sirius Real Estate

Supermarket Income REIT

Risk-Adjusted Performance

0 of 100

Very Weak

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

Sirius Real Estate

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sirius Real Estate has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Supermarket Income and Sirius Real

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

The idea behind Supermarket Income REIT and Sirius Real Estate 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.