Correlation Between Superior Plus and American International
Can any of the company-specific risk be diversified away by investing in both Superior Plus and American International 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 American International 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 American International Group, you can compare the effects of market volatilities on Superior Plus and American International 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 American International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Superior Plus and American International.
Diversification Opportunities for Superior Plus and American International
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Superior and American is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Superior Plus Corp and American International Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American International 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 American International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American International has no effect on the direction of Superior Plus i.e., Superior Plus and American International go up and down completely randomly.
Pair Corralation between Superior Plus and American International
Assuming the 90 days horizon Superior Plus Corp is expected to under-perform the American International. In addition to that, Superior Plus is 3.72 times more volatile than American International Group. It trades about -0.01 of its total potential returns per unit of risk. American International Group is currently generating about 0.07 per unit of volatility. If you would invest 7,117 in American International Group on August 29, 2024 and sell it today you would earn a total of 141.00 from holding American International Group or generate 1.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Superior Plus Corp vs. American International Group
Performance |
| Timeline |
| Superior Plus Corp |
| American International |
Superior Plus and American International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Superior Plus and American International
The main advantage of trading using opposite Superior Plus and American International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Superior Plus position performs unexpectedly, American International 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 American International will offset losses from the drop in American International'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 |
| American International vs. Berkshire Hathaway | American International vs. Berkshire Hathaway | American International vs. Zurich Insurance Group | American International vs. Superior Plus Corp |
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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