Correlation Between Superior Plus and Legend Holdings
Can any of the company-specific risk be diversified away by investing in both Superior Plus and Legend Holdings 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 Legend Holdings 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 Legend Holdings, you can compare the effects of market volatilities on Superior Plus and Legend Holdings 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 Legend Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Superior Plus and Legend Holdings.
Diversification Opportunities for Superior Plus and Legend Holdings
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Superior and Legend is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Superior Plus Corp and Legend Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Legend Holdings 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 Legend Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Legend Holdings has no effect on the direction of Superior Plus i.e., Superior Plus and Legend Holdings go up and down completely randomly.
Pair Corralation between Superior Plus and Legend Holdings
Assuming the 90 days horizon Superior Plus Corp is expected to under-perform the Legend Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Superior Plus Corp is 1.21 times less risky than Legend Holdings. The stock trades about -0.05 of its potential returns per unit of risk. The Legend Holdings is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 60.00 in Legend Holdings on August 28, 2024 and sell it today you would earn a total of 22.00 from holding Legend Holdings or generate 36.67% 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. Legend Holdings
Performance |
| Timeline |
| Superior Plus Corp |
| Legend Holdings |
Superior Plus and Legend Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Superior Plus and Legend Holdings
The main advantage of trading using opposite Superior Plus and Legend Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Superior Plus position performs unexpectedly, Legend Holdings 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 Legend Holdings will offset losses from the drop in Legend Holdings' long position.| Superior Plus vs. CDL INVESTMENT | Superior Plus vs. ECHO INVESTMENT ZY | Superior Plus vs. SEI INVESTMENTS | Superior Plus vs. Gruppo Mutuionline SpA |
| Legend Holdings vs. Superior Plus Corp | Legend Holdings vs. Origin Agritech | Legend Holdings vs. Identiv | Legend Holdings vs. INTUITIVE SURGICAL |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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