Correlation Between Superior Plus and Anfield Resources
Can any of the company-specific risk be diversified away by investing in both Superior Plus and Anfield Resources 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 Superior Plus and Anfield Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Superior Plus Corp and Anfield Resources, you can compare the effects of market volatilities on Superior Plus and Anfield Resources 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 Superior Plus with a short position of Anfield Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Superior Plus and Anfield Resources.
Diversification Opportunities for Superior Plus and Anfield Resources
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Superior and Anfield is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Superior Plus Corp and Anfield Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anfield Resources and Superior Plus 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 Superior Plus Corp are associated (or correlated) with Anfield Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anfield Resources has no effect on the direction of Superior Plus i.e., Superior Plus and Anfield Resources go up and down completely randomly.
Pair Corralation between Superior Plus and Anfield Resources
Assuming the 90 days horizon Superior Plus Corp is expected to under-perform the Anfield Resources. But the stock apears to be less risky and, when comparing its historical volatility, Superior Plus Corp is 6.49 times less risky than Anfield Resources. The stock trades about -0.03 of its potential returns per unit of risk. The Anfield Resources is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 2.90 in Anfield Resources on September 12, 2024 and sell it today you would earn a total of 2.55 from holding Anfield Resources or generate 87.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Superior Plus Corp vs. Anfield Resources
Performance |
| Timeline |
| Superior Plus Corp |
| Anfield Resources |
Superior Plus and Anfield Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Superior Plus and Anfield Resources
The main advantage of trading using opposite Superior Plus and Anfield Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Superior Plus position performs unexpectedly, Anfield Resources 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 Anfield Resources will offset losses from the drop in Anfield Resources' long position.| Superior Plus vs. AIR PRODCHEMICALS | Superior Plus vs. Suntory Beverage Food | Superior Plus vs. Molson Coors Beverage | Superior Plus vs. Monster Beverage Corp |
| Anfield Resources vs. Meli Hotels International | Anfield Resources vs. Granite Construction | Anfield Resources vs. Xenia Hotels Resorts | Anfield Resources vs. Australian Agricultural |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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