Correlation Between VerifyMe and Supercom

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

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

Diversification Opportunities for VerifyMe and Supercom

0.85

Correlation Coefficient

VerifyMe  Supercom

Very poor diversification

The 3 months correlation between VerifyMe and Supercom is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding VerifyMe and Supercom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Supercom and VerifyMe 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 VerifyMe are associated (or correlated) with Supercom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Supercom has no effect on the direction of VerifyMe i.e., VerifyMe and Supercom go up and down completely randomly.

Pair Corralation between VerifyMe and Supercom

Given the investment horizon of 90 days VerifyMe is expected to generate 0.87 times more return on investment than Supercom. However, VerifyMe is 1.15 times less risky than Supercom. It trades about -0.07 of its potential returns per unit of risk. Supercom is currently generating about -0.1 per unit of risk. If you would invest  100.00  in VerifyMe on February 16, 2025 and sell it today you would lose (29.00) from holding VerifyMe or give up 29.0% of portfolio value over 90 days.

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

VerifyMe  vs.  Supercom

VerifyMe

Risk-Adjusted Performance

Very Weak

Over the last 90 days VerifyMe has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's primary indicators remain rather sound which may send shares a bit higher in June 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Supercom

Risk-Adjusted Performance

Very Weak

Over the last 90 days Supercom has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's fundamental indicators remain somewhat strong which may send shares a bit higher in June 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with VerifyMe and Supercom

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

The idea behind VerifyMe and Supercom 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.