Correlation Between Superior Plus and Prosafe SE
Can any of the company-specific risk be diversified away by investing in both Superior Plus and Prosafe SE 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 Prosafe SE 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 Prosafe SE, you can compare the effects of market volatilities on Superior Plus and Prosafe SE 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 Prosafe SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Superior Plus and Prosafe SE.
Diversification Opportunities for Superior Plus and Prosafe SE
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Superior and Prosafe is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Superior Plus Corp and Prosafe SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prosafe SE 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 Prosafe SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prosafe SE has no effect on the direction of Superior Plus i.e., Superior Plus and Prosafe SE go up and down completely randomly.
Pair Corralation between Superior Plus and Prosafe SE
Assuming the 90 days horizon Superior Plus Corp is expected to generate 0.65 times more return on investment than Prosafe SE. However, Superior Plus Corp is 1.53 times less risky than Prosafe SE. It trades about 0.03 of its potential returns per unit of risk. Prosafe SE is currently generating about -0.55 per unit of risk. If you would invest 426.00 in Superior Plus Corp on September 1, 2024 and sell it today you would earn a total of 2.00 from holding Superior Plus Corp or generate 0.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Superior Plus Corp vs. Prosafe SE
Performance |
| Timeline |
| Superior Plus Corp |
| Prosafe SE |
Superior Plus and Prosafe SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Superior Plus and Prosafe SE
The main advantage of trading using opposite Superior Plus and Prosafe SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Superior Plus position performs unexpectedly, Prosafe SE 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 Prosafe SE will offset losses from the drop in Prosafe SE's long position.| Superior Plus vs. TSOGO SUN GAMING | Superior Plus vs. FUTURE GAMING GRP | Superior Plus vs. TROPHY GAMES DEV | Superior Plus vs. Boyd Gaming |
| Prosafe SE vs. Tenaris SA | Prosafe SE vs. Superior Plus Corp | Prosafe SE vs. NMI Holdings | Prosafe SE vs. Origin Agritech |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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