Correlation Between Supercom and Applied DNA

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

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

Diversification Opportunities for Supercom and Applied DNA

-0.71

Correlation Coefficient

Supercom  Applied DNA

Pay attention - limited upside

The 3 months correlation between Supercom and Applied is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Supercom and Applied DNA Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Applied DNA Sciences and Supercom 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 Supercom are associated (or correlated) with Applied DNA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Applied DNA Sciences has no effect on the direction of Supercom i.e., Supercom and Applied DNA go up and down completely randomly.

Pair Corralation between Supercom and Applied DNA

Given the investment horizon of 90 days Supercom is expected to generate 0.72 times more return on investment than Applied DNA. However, Supercom is 1.4 times less risky than Applied DNA. It trades about 0.05 of its potential returns per unit of risk. Applied DNA Sciences is currently generating about -0.13 per unit of risk. If you would invest  869.00  in Supercom on May 21, 2025 and sell it today you would earn a total of  70.00  from holding Supercom or generate 8.06% return on investment over 90 days.

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

Supercom  vs.  Applied DNA Sciences

Supercom

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Supercom are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat inconsistent fundamental indicators, Supercom sustained solid returns over the last few months and may actually be approaching a breakup point.

Applied DNA Sciences

Risk-Adjusted Performance

Weakest

Over the last 90 days Applied DNA Sciences 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 fundamental indicators remain very healthy which may send shares a bit higher in September 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Supercom and Applied DNA

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

The idea behind Supercom and Applied DNA Sciences 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.