Correlation Between Supply@Me Capital and Hansa Trust

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

Diversification Opportunities for Supply@Me Capital and Hansa Trust

0.12

Correlation Coefficient

Supply@Me Capital  Hansa Trust

Average diversification

The 3 months correlation between Supply@Me and Hansa is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding SupplyMe Capital PLC and Hansa Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hansa Trust 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 Hansa Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hansa Trust has no effect on the direction of Supply@Me Capital i.e., Supply@Me Capital and Hansa Trust go up and down completely randomly.

Pair Corralation between Supply@Me Capital and Hansa Trust

Assuming the 90 days trading horizon SupplyMe Capital PLC is expected to generate 27.99 times more return on investment than Hansa Trust. However, Supply@Me Capital is 27.99 times more volatile than Hansa Trust. It trades about 0.09 of its potential returns per unit of risk. Hansa Trust is currently generating about 0.11 per unit of risk. If you would invest  0.30  in SupplyMe Capital PLC on December 1, 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	Insignificant
Accuracy	98.41%
Values	Daily Returns

SupplyMe Capital PLC  vs.  Hansa Trust

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.

Hansa Trust

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Hansa Trust are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Hansa Trust is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Supply@Me Capital and Hansa Trust

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

The idea behind SupplyMe Capital PLC and Hansa Trust 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.

Check out your portfolio center.

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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.