Correlation Between AIA Group and Superior Plus
Can any of the company-specific risk be diversified away by investing in both AIA Group 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 AIA Group and Superior Plus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AIA Group Limited and Superior Plus Corp, you can compare the effects of market volatilities on AIA Group 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 AIA Group with a short position of Superior Plus. Check out your portfolio center. Please also check ongoing floating volatility patterns of AIA Group and Superior Plus.
Diversification Opportunities for AIA Group and Superior Plus
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between AIA and Superior is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding AIA Group Limited 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 AIA Group 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 AIA Group Limited 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 AIA Group i.e., AIA Group and Superior Plus go up and down completely randomly.
Pair Corralation between AIA Group and Superior Plus
Assuming the 90 days horizon AIA Group Limited is expected to under-perform the Superior Plus. But the stock apears to be less risky and, when comparing its historical volatility, AIA Group Limited is 2.86 times less risky than Superior Plus. The stock trades about -0.1 of its potential returns per unit of risk. The Superior Plus Corp is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 414.00 in Superior Plus Corp on August 30, 2024 and sell it today you would earn a total of 2.00 from holding Superior Plus Corp or generate 0.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
AIA Group Limited vs. Superior Plus Corp
Performance |
| Timeline |
| AIA Group Limited |
| Superior Plus Corp |
AIA Group and Superior Plus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AIA Group and Superior Plus
The main advantage of trading using opposite AIA Group and Superior Plus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AIA Group 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.| AIA Group vs. INTERCONT HOTELS | AIA Group vs. HF SINCLAIR P | AIA Group vs. Xenia Hotels Resorts | AIA Group vs. Alaska Air Group |
| Superior Plus vs. HYDROFARM HLD GRP | Superior Plus vs. Titan Machinery | Superior Plus vs. GOODYEAR T RUBBER | Superior Plus vs. Sterling Construction |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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