Correlation Between Superior Plus and COFCO Joycome
Can any of the company-specific risk be diversified away by investing in both Superior Plus and COFCO Joycome 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 COFCO Joycome 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 COFCO Joycome Foods, you can compare the effects of market volatilities on Superior Plus and COFCO Joycome 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 COFCO Joycome. Check out your portfolio center. Please also check ongoing floating volatility patterns of Superior Plus and COFCO Joycome.
Diversification Opportunities for Superior Plus and COFCO Joycome
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Superior and COFCO is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Superior Plus Corp and COFCO Joycome Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COFCO Joycome Foods 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 COFCO Joycome. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COFCO Joycome Foods has no effect on the direction of Superior Plus i.e., Superior Plus and COFCO Joycome go up and down completely randomly.
Pair Corralation between Superior Plus and COFCO Joycome
Assuming the 90 days horizon Superior Plus Corp is expected to under-perform the COFCO Joycome. But the stock apears to be less risky and, when comparing its historical volatility, Superior Plus Corp is 1.69 times less risky than COFCO Joycome. The stock trades about -0.02 of its potential returns per unit of risk. The COFCO Joycome Foods is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 25.00 in COFCO Joycome Foods on December 1, 2024 and sell it today you would lose (8.00) from holding COFCO Joycome Foods or give up 32.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Superior Plus Corp vs. COFCO Joycome Foods
Performance |
| Timeline |
| Superior Plus Corp |
| COFCO Joycome Foods |
Superior Plus and COFCO Joycome Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Superior Plus and COFCO Joycome
The main advantage of trading using opposite Superior Plus and COFCO Joycome positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Superior Plus position performs unexpectedly, COFCO Joycome 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 COFCO Joycome will offset losses from the drop in COFCO Joycome's long position.The idea behind Superior Plus Corp and COFCO Joycome Foods pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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