Correlation Between Superior Plus and Bridgestone
Can any of the company-specific risk be diversified away by investing in both Superior Plus and Bridgestone 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 Bridgestone 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 Bridgestone, you can compare the effects of market volatilities on Superior Plus and Bridgestone 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 Bridgestone. Check out your portfolio center. Please also check ongoing floating volatility patterns of Superior Plus and Bridgestone.
Diversification Opportunities for Superior Plus and Bridgestone
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Superior and Bridgestone is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Superior Plus Corp and Bridgestone in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bridgestone 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 Bridgestone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bridgestone has no effect on the direction of Superior Plus i.e., Superior Plus and Bridgestone go up and down completely randomly.
Pair Corralation between Superior Plus and Bridgestone
Assuming the 90 days horizon Superior Plus Corp is expected to generate 2.41 times more return on investment than Bridgestone. However, Superior Plus is 2.41 times more volatile than Bridgestone. It trades about 0.15 of its potential returns per unit of risk. Bridgestone is currently generating about 0.0 per unit of risk. If you would invest 416.00 in Superior Plus Corp on September 14, 2024 and sell it today you would earn a total of 28.00 from holding Superior Plus Corp or generate 6.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Superior Plus Corp vs. Bridgestone
Performance |
| Timeline |
| Superior Plus Corp |
| Bridgestone |
Superior Plus and Bridgestone Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Superior Plus and Bridgestone
The main advantage of trading using opposite Superior Plus and Bridgestone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Superior Plus position performs unexpectedly, Bridgestone 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 Bridgestone will offset losses from the drop in Bridgestone's long position.| Superior Plus vs. Boiron SA | Superior Plus vs. COSMOSTEEL HLDGS | Superior Plus vs. Vastned Retail NV | Superior Plus vs. BURLINGTON STORES |
| Bridgestone vs. Highlight Communications AG | Bridgestone vs. Tower One Wireless | Bridgestone vs. NEWELL RUBBERMAID | Bridgestone vs. Consolidated Communications Holdings |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |