Correlation Between 125896BU3 and Supercom

Can any of the company-specific risk be diversified away by investing in both 125896BU3 and Supercom 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 125896BU3 and Supercom into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between US125896BU39 and Supercom, you can compare the effects of market volatilities on 125896BU3 and Supercom 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 125896BU3 with a short position of Supercom. Check out your portfolio center. Please also check ongoing floating volatility patterns of 125896BU3 and Supercom.

Diversification Opportunities for 125896BU3 and Supercom

-0.12

Correlation Coefficient

125896BU3  Supercom

Good diversification

The 3 months correlation between 125896BU3 and Supercom is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding US125896BU39 and Supercom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Supercom and 125896BU3 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 US125896BU39 are associated (or correlated) with Supercom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Supercom has no effect on the direction of 125896BU3 i.e., 125896BU3 and Supercom go up and down completely randomly.

Pair Corralation between 125896BU3 and Supercom

Assuming the 90 days trading horizon US125896BU39 is expected to under-perform the Supercom. But the bond apears to be less risky and, when comparing its historical volatility, US125896BU39 is 3.89 times less risky than Supercom. The bond trades about -0.09 of its potential returns per unit of risk. The Supercom is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  288.00  in Supercom on August 31, 2024 and sell it today you would earn a total of  60.00  from holding Supercom or generate 20.83% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.83%
Values	Daily Returns

US125896BU39  vs.  Supercom

US125896BU39

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days US125896BU39 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for US125896BU39 investors.

Supercom

Risk-Adjusted Performance

6 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Supercom are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat fragile fundamental indicators, Supercom sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with 125896BU3 and Supercom

The main advantage of trading using opposite 125896BU3 and Supercom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 125896BU3 position performs unexpectedly, Supercom 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 Supercom will offset losses from the drop in Supercom's long position.

The idea behind US125896BU39 and Supercom 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.