Correlation Between NEW PACIFIC and Superior Plus
Can any of the company-specific risk be diversified away by investing in both NEW PACIFIC and Superior Plus 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 NEW PACIFIC and Superior Plus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NEW PACIFIC METALS and Superior Plus Corp, you can compare the effects of market volatilities on NEW PACIFIC and Superior Plus 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 NEW PACIFIC with a short position of Superior Plus. Check out your portfolio center. Please also check ongoing floating volatility patterns of NEW PACIFIC and Superior Plus.
Diversification Opportunities for NEW PACIFIC and Superior Plus
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NEW and Superior is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding NEW PACIFIC METALS and Superior Plus Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Superior Plus Corp and NEW PACIFIC 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 NEW PACIFIC METALS are associated (or correlated) with Superior Plus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Superior Plus Corp has no effect on the direction of NEW PACIFIC i.e., NEW PACIFIC and Superior Plus go up and down completely randomly.
Pair Corralation between NEW PACIFIC and Superior Plus
Assuming the 90 days trading horizon NEW PACIFIC is expected to generate 1.04 times less return on investment than Superior Plus. In addition to that, NEW PACIFIC is 1.4 times more volatile than Superior Plus Corp. It trades about 0.11 of its total potential returns per unit of risk. Superior Plus Corp is currently generating about 0.15 per unit of volatility. If you would invest 416.00 in Superior Plus Corp on September 14, 2024 and sell it today you would earn a total of 28.00 from holding Superior Plus Corp or generate 6.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NEW PACIFIC METALS vs. Superior Plus Corp
Performance |
| Timeline |
| NEW PACIFIC METALS |
| Superior Plus Corp |
NEW PACIFIC and Superior Plus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NEW PACIFIC and Superior Plus
The main advantage of trading using opposite NEW PACIFIC and Superior Plus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NEW PACIFIC position performs unexpectedly, Superior Plus 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 Superior Plus will offset losses from the drop in Superior Plus' long position.| NEW PACIFIC vs. Superior Plus Corp | NEW PACIFIC vs. SIVERS SEMICONDUCTORS AB | NEW PACIFIC vs. Norsk Hydro ASA | NEW PACIFIC vs. Reliance Steel Aluminum |
| Superior Plus vs. Boiron SA | Superior Plus vs. COSMOSTEEL HLDGS | Superior Plus vs. Vastned Retail NV | Superior Plus vs. BURLINGTON STORES |
Check out your portfolio center.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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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