Correlation Between Supernova Energy and Tourmaline Bio

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

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

Diversification Opportunities for Supernova Energy and Tourmaline Bio

0.22

Correlation Coefficient

Supernova Energy  Tourmaline Bio

Modest diversification

The 3 months correlation between Supernova and Tourmaline is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Supernova Energy and Tourmaline Bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tourmaline Bio and Supernova Energy 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 Supernova Energy are associated (or correlated) with Tourmaline Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tourmaline Bio has no effect on the direction of Supernova Energy i.e., Supernova Energy and Tourmaline Bio go up and down completely randomly.

Pair Corralation between Supernova Energy and Tourmaline Bio

Given the investment horizon of 90 days Supernova Energy is expected to generate 16.0 times more return on investment than Tourmaline Bio. However, Supernova Energy is 16.0 times more volatile than Tourmaline Bio. It trades about 0.11 of its potential returns per unit of risk. Tourmaline Bio is currently generating about 0.25 per unit of risk. If you would invest  0.01  in Supernova Energy on July 1, 2025 and sell it today you would earn a total of  0.00  from holding Supernova Energy or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.46%
Values	Daily Returns

Supernova Energy  vs.  Tourmaline Bio

Supernova Energy

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Supernova Energy are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Supernova Energy displayed solid returns over the last few months and may actually be approaching a breakup point.

Tourmaline Bio

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Tourmaline Bio are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite quite uncertain primary indicators, Tourmaline Bio disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Supernova Energy and Tourmaline Bio

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

The idea behind Supernova Energy and Tourmaline Bio 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.