Correlation Between L3Harris Technologies and Supermarket Income

Can any of the company-specific risk be diversified away by investing in both L3Harris Technologies and Supermarket Income 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 L3Harris Technologies and Supermarket Income into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between L3Harris Technologies and Supermarket Income REIT, you can compare the effects of market volatilities on L3Harris Technologies and Supermarket Income 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 L3Harris Technologies with a short position of Supermarket Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of L3Harris Technologies and Supermarket Income.

Diversification Opportunities for L3Harris Technologies and Supermarket Income

0.91

Correlation Coefficient

L3Harris Technologies  Supermarket Income

Almost no diversification

The 3 months correlation between L3Harris and Supermarket is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding L3Harris Technologies and Supermarket Income REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Supermarket Income REIT and L3Harris Technologies 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 L3Harris Technologies are associated (or correlated) with Supermarket Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Supermarket Income REIT has no effect on the direction of L3Harris Technologies i.e., L3Harris Technologies and Supermarket Income go up and down completely randomly.

Pair Corralation between L3Harris Technologies and Supermarket Income

Assuming the 90 days trading horizon L3Harris Technologies is expected to generate 1.24 times less return on investment than Supermarket Income. But when comparing it to its historical volatility, L3Harris Technologies is 1.06 times less risky than Supermarket Income. It trades about 0.05 of its potential returns per unit of risk. Supermarket Income REIT is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  5,975  in Supermarket Income REIT on March 30, 2025 and sell it today you would earn a total of  2,535  from holding Supermarket Income REIT or generate 42.43% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	99.0%
Values	Daily Returns

L3Harris Technologies  vs.  Supermarket Income REIT

L3Harris Technologies

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in L3Harris Technologies are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, L3Harris Technologies unveiled solid returns over the last few months and may actually be approaching a breakup point.

Supermarket Income REIT

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Supermarket Income REIT are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Supermarket Income unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with L3Harris Technologies and Supermarket Income

The main advantage of trading using opposite L3Harris Technologies and Supermarket Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if L3Harris Technologies position performs unexpectedly, Supermarket Income 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 Supermarket Income will offset losses from the drop in Supermarket Income's long position.

The idea behind L3Harris Technologies and Supermarket Income REIT 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.