Correlation Between Supply@Me Capital and MG Plc

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

Diversification Opportunities for Supply@Me Capital and MG Plc

0.01

Correlation Coefficient

Supply@Me Capital  MG Plc

Significant diversification

The 3 months correlation between Supply@Me and MNG is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding SupplyMe Capital PLC and MG Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MG Plc 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 MG Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MG Plc has no effect on the direction of Supply@Me Capital i.e., Supply@Me Capital and MG Plc go up and down completely randomly.

Pair Corralation between Supply@Me Capital and MG Plc

Assuming the 90 days trading horizon SupplyMe Capital PLC is expected to generate 17.51 times more return on investment than MG Plc. However, Supply@Me Capital is 17.51 times more volatile than MG Plc. It trades about 0.07 of its potential returns per unit of risk. MG Plc is currently generating about 0.16 per unit of risk. If you would invest  0.40  in SupplyMe Capital PLC on December 22, 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 Together
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

SupplyMe Capital PLC  vs.  MG 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, Supply@Me Capital unveiled solid returns over the last few months and may actually be approaching a breakup point.

MG Plc

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in MG Plc are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, MG Plc may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Supply@Me Capital and MG Plc

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

The idea behind SupplyMe Capital PLC and MG 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.