Correlation Between SupplyMe Capital and Associated British

Can any of the company-specific risk be diversified away by investing in both SupplyMe Capital and Associated British 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 SupplyMe Capital and Associated British 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 Associated British Foods, you can compare the effects of market volatilities on SupplyMe Capital and Associated British 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 SupplyMe Capital with a short position of Associated British. Check out your portfolio center. Please also check ongoing floating volatility patterns of SupplyMe Capital and Associated British.

Diversification Opportunities for SupplyMe Capital and Associated British

0.23

Correlation Coefficient

SupplyMe Capital  Associated British

Modest diversification

The 3 months correlation between SupplyMe and Associated is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding SupplyMe Capital PLC and Associated British Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Associated British Foods and SupplyMe 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 Associated British. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Associated British Foods has no effect on the direction of SupplyMe Capital i.e., SupplyMe Capital and Associated British go up and down completely randomly.

Pair Corralation between SupplyMe Capital and Associated British

Assuming the 90 days trading horizon SupplyMe Capital PLC is expected to under-perform the Associated British. In addition to that, SupplyMe Capital is 7.07 times more volatile than Associated British Foods. It trades about -0.07 of its total potential returns per unit of risk. Associated British Foods is currently generating about -0.11 per unit of volatility. If you would invest  248,300  in Associated British Foods on September 1, 2024 and sell it today you would lose (28,500) from holding Associated British Foods or give up 11.48% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.48%
Values	Daily Returns

SupplyMe Capital PLC  vs.  Associated British Foods

SupplyMe Capital PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SupplyMe Capital PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in December 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Associated British Foods

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Associated British Foods has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain 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 SupplyMe Capital and Associated British

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

The idea behind SupplyMe Capital PLC and Associated British Foods 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.