Correlation Between Superior Plus and WUXI BIOLOGICS
Can any of the company-specific risk be diversified away by investing in both Superior Plus and WUXI BIOLOGICS 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 WUXI BIOLOGICS 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 WUXI BIOLOGICS UNSPADR2, you can compare the effects of market volatilities on Superior Plus and WUXI BIOLOGICS 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 WUXI BIOLOGICS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Superior Plus and WUXI BIOLOGICS.
Diversification Opportunities for Superior Plus and WUXI BIOLOGICS
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Superior and WUXI is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Superior Plus Corp and WUXI BIOLOGICS UNSPADR2 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WUXI BIOLOGICS UNSPADR2 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 WUXI BIOLOGICS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WUXI BIOLOGICS UNSPADR2 has no effect on the direction of Superior Plus i.e., Superior Plus and WUXI BIOLOGICS go up and down completely randomly.
Pair Corralation between Superior Plus and WUXI BIOLOGICS
Assuming the 90 days horizon Superior Plus Corp is expected to under-perform the WUXI BIOLOGICS. But the stock apears to be less risky and, when comparing its historical volatility, Superior Plus Corp is 1.35 times less risky than WUXI BIOLOGICS. The stock trades about -0.09 of its potential returns per unit of risk. The WUXI BIOLOGICS UNSPADR2 is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 386.00 in WUXI BIOLOGICS UNSPADR2 on August 29, 2024 and sell it today you would lose (36.00) from holding WUXI BIOLOGICS UNSPADR2 or give up 9.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.67% |
| Values | Daily Returns |
Superior Plus Corp vs. WUXI BIOLOGICS UNSPADR2
Performance |
| Timeline |
| Superior Plus Corp |
| WUXI BIOLOGICS UNSPADR2 |
Superior Plus and WUXI BIOLOGICS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Superior Plus and WUXI BIOLOGICS
The main advantage of trading using opposite Superior Plus and WUXI BIOLOGICS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Superior Plus position performs unexpectedly, WUXI BIOLOGICS 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 WUXI BIOLOGICS will offset losses from the drop in WUXI BIOLOGICS's long position.| Superior Plus vs. Meli Hotels International | Superior Plus vs. InterContinental Hotels Group | Superior Plus vs. PT Bank Maybank | Superior Plus vs. Pebblebrook Hotel Trust |
| WUXI BIOLOGICS vs. Siamgas And Petrochemicals | WUXI BIOLOGICS vs. Sixt Leasing SE | WUXI BIOLOGICS vs. Kaiser Aluminum | WUXI BIOLOGICS vs. Air Lease |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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