Correlation Between Superior Plus and AIA Group
Can any of the company-specific risk be diversified away by investing in both Superior Plus and AIA Group 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 AIA Group 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 AIA Group Limited, you can compare the effects of market volatilities on Superior Plus and AIA Group 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 AIA Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Superior Plus and AIA Group.
Diversification Opportunities for Superior Plus and AIA Group
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Superior and AIA is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Superior Plus Corp and AIA Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AIA Group Limited 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 AIA Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AIA Group Limited has no effect on the direction of Superior Plus i.e., Superior Plus and AIA Group go up and down completely randomly.
Pair Corralation between Superior Plus and AIA Group
Assuming the 90 days horizon Superior Plus Corp is expected to generate 2.86 times more return on investment than AIA Group. However, Superior Plus is 2.86 times more volatile than AIA Group Limited. It trades about 0.03 of its potential returns per unit of risk. AIA Group Limited is currently generating about -0.1 per unit of risk. If you would invest 414.00 in Superior Plus Corp on August 30, 2024 and sell it today you would earn a total of 2.00 from holding Superior Plus Corp or generate 0.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Superior Plus Corp vs. AIA Group Limited
Performance |
| Timeline |
| Superior Plus Corp |
| AIA Group Limited |
Superior Plus and AIA Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Superior Plus and AIA Group
The main advantage of trading using opposite Superior Plus and AIA Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Superior Plus position performs unexpectedly, AIA Group 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 AIA Group will offset losses from the drop in AIA Group's long position.| Superior Plus vs. HYDROFARM HLD GRP | Superior Plus vs. Titan Machinery | Superior Plus vs. GOODYEAR T RUBBER | Superior Plus vs. Sterling Construction |
| AIA Group vs. INTERCONT HOTELS | AIA Group vs. HF SINCLAIR P | AIA Group vs. Xenia Hotels Resorts | AIA Group vs. Alaska Air Group |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |