Correlation Between Superior Plus and Restaurant Brands
Can any of the company-specific risk be diversified away by investing in both Superior Plus and Restaurant Brands 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 Restaurant Brands 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 Restaurant Brands International, you can compare the effects of market volatilities on Superior Plus and Restaurant Brands 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 Restaurant Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Superior Plus and Restaurant Brands.
Diversification Opportunities for Superior Plus and Restaurant Brands
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Superior and Restaurant is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Superior Plus Corp and Restaurant Brands Internationa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Restaurant Brands 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 Restaurant Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Restaurant Brands has no effect on the direction of Superior Plus i.e., Superior Plus and Restaurant Brands go up and down completely randomly.
Pair Corralation between Superior Plus and Restaurant Brands
Assuming the 90 days horizon Superior Plus Corp is expected to under-perform the Restaurant Brands. In addition to that, Superior Plus is 2.43 times more volatile than Restaurant Brands International. It trades about -0.04 of its total potential returns per unit of risk. Restaurant Brands International is currently generating about 0.09 per unit of volatility. If you would invest 6,109 in Restaurant Brands International on September 4, 2024 and sell it today you would earn a total of 485.00 from holding Restaurant Brands International or generate 7.94% 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. Restaurant Brands Internationa
Performance |
| Timeline |
| Superior Plus Corp |
| Restaurant Brands |
Superior Plus and Restaurant Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Superior Plus and Restaurant Brands
The main advantage of trading using opposite Superior Plus and Restaurant Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Superior Plus position performs unexpectedly, Restaurant Brands 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 Restaurant Brands will offset losses from the drop in Restaurant Brands' long position.| Superior Plus vs. Food Life Companies | Superior Plus vs. Mitsubishi Materials | Superior Plus vs. United Natural Foods | Superior Plus vs. NEWELL RUBBERMAID |
| Restaurant Brands vs. McDonalds | Restaurant Brands vs. Chipotle Mexican Grill | Restaurant Brands vs. Superior Plus Corp | Restaurant Brands vs. NMI Holdings |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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