Correlation Between Superior Plus and GANGLONG CHINA
Can any of the company-specific risk be diversified away by investing in both Superior Plus and GANGLONG CHINA 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 GANGLONG CHINA 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 GANGLONG CHINA PRGRLTD, you can compare the effects of market volatilities on Superior Plus and GANGLONG CHINA 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 GANGLONG CHINA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Superior Plus and GANGLONG CHINA.
Diversification Opportunities for Superior Plus and GANGLONG CHINA
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Superior and GANGLONG is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Superior Plus Corp and GANGLONG CHINA PRGRLTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GANGLONG CHINA PRGRLTD 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 GANGLONG CHINA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GANGLONG CHINA PRGRLTD has no effect on the direction of Superior Plus i.e., Superior Plus and GANGLONG CHINA go up and down completely randomly.
Pair Corralation between Superior Plus and GANGLONG CHINA
Assuming the 90 days horizon Superior Plus Corp is expected to under-perform the GANGLONG CHINA. But the stock apears to be less risky and, when comparing its historical volatility, Superior Plus Corp is 29.6 times less risky than GANGLONG CHINA. The stock trades about -0.09 of its potential returns per unit of risk. The GANGLONG CHINA PRGRLTD is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 0.85 in GANGLONG CHINA PRGRLTD on November 6, 2024 and sell it today you would lose (0.40) from holding GANGLONG CHINA PRGRLTD or give up 47.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Superior Plus Corp vs. GANGLONG CHINA PRGRLTD
Performance |
| Timeline |
| Superior Plus Corp |
| GANGLONG CHINA PRGRLTD |
Superior Plus and GANGLONG CHINA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Superior Plus and GANGLONG CHINA
The main advantage of trading using opposite Superior Plus and GANGLONG CHINA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Superior Plus position performs unexpectedly, GANGLONG CHINA 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 GANGLONG CHINA will offset losses from the drop in GANGLONG CHINA's long position.| Superior Plus vs. Take Two Interactive Software | Superior Plus vs. CORNISH METALS INC | Superior Plus vs. PARKEN Sport Entertainment | Superior Plus vs. Yuexiu Transport Infrastructure |
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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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