Correlation Between Superior Plus and Bechtle AG
Can any of the company-specific risk be diversified away by investing in both Superior Plus and Bechtle AG 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 Bechtle AG 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 Bechtle AG, you can compare the effects of market volatilities on Superior Plus and Bechtle AG 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 Bechtle AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Superior Plus and Bechtle AG.
Diversification Opportunities for Superior Plus and Bechtle AG
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Superior and Bechtle is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Superior Plus Corp and Bechtle AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bechtle AG 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 Bechtle AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bechtle AG has no effect on the direction of Superior Plus i.e., Superior Plus and Bechtle AG go up and down completely randomly.
Pair Corralation between Superior Plus and Bechtle AG
Assuming the 90 days horizon Superior Plus Corp is expected to generate 3.31 times more return on investment than Bechtle AG. However, Superior Plus is 3.31 times more volatile than Bechtle AG. It trades about 0.02 of its potential returns per unit of risk. Bechtle AG is currently generating about -0.02 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 0.00 from holding Superior Plus Corp or generate 0.0% 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. Bechtle AG
Performance |
| Timeline |
| Superior Plus Corp |
| Bechtle AG |
Superior Plus and Bechtle AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Superior Plus and Bechtle AG
The main advantage of trading using opposite Superior Plus and Bechtle AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Superior Plus position performs unexpectedly, Bechtle AG 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 Bechtle AG will offset losses from the drop in Bechtle AG'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 |
| Bechtle AG vs. FUJITSU LTD ADR | Bechtle AG vs. Superior Plus Corp | Bechtle AG vs. NMI Holdings | Bechtle AG 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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