Correlation Between Supply@Me Capital and Alior Bank

Can any of the company-specific risk be diversified away by investing in both Supply@Me Capital and Alior Bank 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 Supply@Me Capital and Alior Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Supply@Me Capital and Alior Bank

0.25

Correlation Coefficient

Supply@Me Capital  Alior Bank

Modest diversification

The 3 months correlation between Supply@Me and Alior is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding SupplyMe Capital PLC and Alior Bank SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alior Bank SA and Supply@Me Capital 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 SupplyMe Capital PLC are associated (or correlated) with Alior Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alior Bank SA has no effect on the direction of Supply@Me Capital i.e., Supply@Me Capital and Alior Bank go up and down completely randomly.

Pair Corralation between Supply@Me Capital and Alior Bank

Assuming the 90 days trading horizon SupplyMe Capital PLC is expected to generate 4.91 times more return on investment than Alior Bank. However, Supply@Me Capital is 4.91 times more volatile than Alior Bank SA. It trades about 0.09 of its potential returns per unit of risk. Alior Bank SA is currently generating about -0.03 per unit of risk. If you would invest  0.30  in SupplyMe Capital PLC on December 2, 2024 and sell it today you would earn a total of  0.02  from holding SupplyMe Capital PLC or generate 6.67% return on investment over 90 days.

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

SupplyMe Capital PLC  vs.  Alior Bank SA

SupplyMe Capital PLC

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in SupplyMe Capital PLC are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Supply@Me Capital unveiled solid returns over the last few months and may actually be approaching a breakup point.

Alior Bank SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Alior Bank SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Supply@Me Capital and Alior Bank

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

The idea behind SupplyMe Capital PLC and Alior Bank SA 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.