Correlation Between Supermarket Income and Datatec

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

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

Diversification Opportunities for Supermarket Income and Datatec

0.19

Correlation Coefficient

Supermarket Income  Datatec

Average diversification

The 3 months correlation between Supermarket and Datatec is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Supermarket Income REIT and Datatec in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Datatec and Supermarket Income 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 Supermarket Income REIT are associated (or correlated) with Datatec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Datatec has no effect on the direction of Supermarket Income i.e., Supermarket Income and Datatec go up and down completely randomly.

Pair Corralation between Supermarket Income and Datatec

Assuming the 90 days trading horizon Supermarket Income REIT is expected to under-perform the Datatec. In addition to that, Supermarket Income is 2.91 times more volatile than Datatec. It trades about -0.02 of its total potential returns per unit of risk. Datatec is currently generating about 0.11 per unit of volatility. If you would invest  568,400  in Datatec on April 24, 2025 and sell it today you would earn a total of  42,400  from holding Datatec or generate 7.46% return on investment over 90 days.

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

Supermarket Income REIT  vs.  Datatec

Supermarket Income REIT

Risk-Adjusted Performance

Very Weak

Over the last 90 days Supermarket Income REIT has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Supermarket Income is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Datatec

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Datatec are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Datatec may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Supermarket Income and Datatec

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

The idea behind Supermarket Income REIT and Datatec 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.