Correlation Between Collins Foods and Suncorp Group
Can any of the company-specific risk be diversified away by investing in both Collins Foods and Suncorp Group 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 Collins Foods and Suncorp Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Collins Foods Limited and Suncorp Group Limited, you can compare the effects of market volatilities on Collins Foods and Suncorp Group 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 Collins Foods with a short position of Suncorp Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Collins Foods and Suncorp Group.
Diversification Opportunities for Collins Foods and Suncorp Group
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Collins and Suncorp is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Collins Foods Limited and Suncorp Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Suncorp Group Limited and Collins Foods 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 Collins Foods Limited are associated (or correlated) with Suncorp Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Suncorp Group Limited has no effect on the direction of Collins Foods i.e., Collins Foods and Suncorp Group go up and down completely randomly.
Pair Corralation between Collins Foods and Suncorp Group
Assuming the 90 days horizon Collins Foods Limited is expected to generate 0.65 times more return on investment than Suncorp Group. However, Collins Foods Limited is 1.54 times less risky than Suncorp Group. It trades about 0.05 of its potential returns per unit of risk. Suncorp Group Limited is currently generating about 0.01 per unit of risk. If you would invest 440.00 in Collins Foods Limited on December 4, 2024 and sell it today you would earn a total of 52.00 from holding Collins Foods Limited or generate 11.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.19% |
| Values | Daily Returns |
Collins Foods Limited vs. Suncorp Group Limited
Performance |
| Timeline |
| Collins Foods Limited |
| Suncorp Group Limited |
Collins Foods and Suncorp Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Collins Foods and Suncorp Group
The main advantage of trading using opposite Collins Foods and Suncorp Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Collins Foods position performs unexpectedly, Suncorp Group 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 Suncorp Group will offset losses from the drop in Suncorp Group's long position.| Collins Foods vs. Jacquet Metal Service | Collins Foods vs. GRIFFIN MINING LTD | Collins Foods vs. ADRIATIC METALS LS 013355 | Collins Foods vs. FIREWEED METALS P |
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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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