Correlation Between Supercom and Electronic Control

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

By analyzing existing cross correlation between Supercom and Electronic Control Security, you can compare the effects of market volatilities on Supercom and Electronic Control 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 Electronic Control. Check out your portfolio center. Please also check ongoing floating volatility patterns of Supercom and Electronic Control.

Diversification Opportunities for Supercom and Electronic Control

0.0

Correlation Coefficient

Supercom  Electronic Control

Pay attention - limited upside

The 3 months correlation between Supercom and Electronic is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Supercom and Electronic Control Security in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electronic Control 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 Electronic Control. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Electronic Control has no effect on the direction of Supercom i.e., Supercom and Electronic Control go up and down completely randomly.

Pair Corralation between Supercom and Electronic Control

If you would invest  621.00  in Supercom on May 6, 2025 and sell it today you would earn a total of  243.00  from holding Supercom or generate 39.13% return on investment over 90 days.

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

Supercom  vs.  Electronic Control Security

Supercom

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Supercom are ranked lower than 10 (%) 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.

Electronic Control

Risk-Adjusted Performance

Very Weak

Over the last 90 days Electronic Control Security has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental indicators, Electronic Control is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Supercom and Electronic Control

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

The idea behind Supercom and Electronic Control Security 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.