Correlation Between GPT and Superior Plus
Can any of the company-specific risk be diversified away by investing in both GPT 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 GPT and Superior Plus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GPT Group and Superior Plus Corp, you can compare the effects of market volatilities on GPT 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 GPT with a short position of Superior Plus. Check out your portfolio center. Please also check ongoing floating volatility patterns of GPT and Superior Plus.
Diversification Opportunities for GPT and Superior Plus
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between GPT and Superior is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding GPT Group 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 GPT 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 GPT Group 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 GPT i.e., GPT and Superior Plus go up and down completely randomly.
Pair Corralation between GPT and Superior Plus
Assuming the 90 days horizon GPT Group is expected to under-perform the Superior Plus. But the stock apears to be less risky and, when comparing its historical volatility, GPT Group is 1.58 times less risky than Superior Plus. The stock trades about -0.09 of its potential returns per unit of risk. The Superior Plus Corp is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 472.00 in Superior Plus Corp on September 13, 2024 and sell it today you would lose (32.00) from holding Superior Plus Corp or give up 6.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
GPT Group vs. Superior Plus Corp
Performance |
| Timeline |
| GPT Group |
| Superior Plus Corp |
GPT and Superior Plus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GPT and Superior Plus
The main advantage of trading using opposite GPT and Superior Plus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GPT 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.| GPT vs. Shin Etsu Chemical Co | GPT vs. MagnaChip Semiconductor Corp | GPT vs. Sanyo Chemical Industries | GPT vs. Nordic Semiconductor ASA |
| Superior Plus vs. HF SINCLAIR P | Superior Plus vs. PT Indofood Sukses | Superior Plus vs. SENECA FOODS A | Superior Plus vs. ScanSource |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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