Correlation Between SupplyMe Capital and GB Group

Can any of the company-specific risk be diversified away by investing in both SupplyMe Capital and GB Group 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 GB Group 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 GB Group plc, you can compare the effects of market volatilities on SupplyMe Capital and GB Group 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 GB Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of SupplyMe Capital and GB Group.

Diversification Opportunities for SupplyMe Capital and GB Group

-0.18

Correlation Coefficient

SupplyMe Capital  GB Group

Good diversification

The 3 months correlation between SupplyMe and GBG is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding SupplyMe Capital PLC and GB Group plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GB Group plc 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 GB Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GB Group plc has no effect on the direction of SupplyMe Capital i.e., SupplyMe Capital and GB Group go up and down completely randomly.

Pair Corralation between SupplyMe Capital and GB Group

Assuming the 90 days trading horizon SupplyMe Capital PLC is expected to generate 13.9 times more return on investment than GB Group. However, SupplyMe Capital is 13.9 times more volatile than GB Group plc. It trades about 0.07 of its potential returns per unit of risk. GB Group plc is currently generating about -0.11 per unit of risk. If you would invest  0.40  in SupplyMe Capital PLC on December 30, 2024 and sell it today you would lose (0.05) from holding SupplyMe Capital PLC or give up 12.5% of portfolio value over 90 days.

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

SupplyMe Capital PLC  vs.  GB Group plc

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 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, SupplyMe Capital unveiled solid returns over the last few months and may actually be approaching a breakup point.

GB Group plc

Risk-Adjusted Performance

Very Weak

Over the last 90 days GB Group plc 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 GB Group

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

The idea behind SupplyMe Capital PLC and GB Group plc 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.