Correlation Between Superior Plus and Bayerische Motoren
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By analyzing existing cross correlation between Superior Plus Corp and Bayerische Motoren Werke, you can compare the effects of market volatilities on Superior Plus and Bayerische Motoren 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 Bayerische Motoren. Check out your portfolio center. Please also check ongoing floating volatility patterns of Superior Plus and Bayerische Motoren.
Diversification Opportunities for Superior Plus and Bayerische Motoren
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Superior and Bayerische is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Superior Plus Corp and Bayerische Motoren Werke in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bayerische Motoren Werke 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 Bayerische Motoren. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bayerische Motoren Werke has no effect on the direction of Superior Plus i.e., Superior Plus and Bayerische Motoren go up and down completely randomly.
Pair Corralation between Superior Plus and Bayerische Motoren
Assuming the 90 days horizon Superior Plus Corp is expected to under-perform the Bayerische Motoren. In addition to that, Superior Plus is 1.4 times more volatile than Bayerische Motoren Werke. It trades about -0.03 of its total potential returns per unit of risk. Bayerische Motoren Werke is currently generating about -0.02 per unit of volatility. If you would invest 8,601 in Bayerische Motoren Werke on September 12, 2024 and sell it today you would lose (1,211) from holding Bayerische Motoren Werke or give up 14.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Superior Plus Corp vs. Bayerische Motoren Werke
Performance |
| Timeline |
| Superior Plus Corp |
| Bayerische Motoren Werke |
Superior Plus and Bayerische Motoren Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Superior Plus and Bayerische Motoren
The main advantage of trading using opposite Superior Plus and Bayerische Motoren positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Superior Plus position performs unexpectedly, Bayerische Motoren 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 Bayerische Motoren will offset losses from the drop in Bayerische Motoren's long position.| Superior Plus vs. AIR PRODCHEMICALS | Superior Plus vs. Suntory Beverage Food | Superior Plus vs. Molson Coors Beverage | Superior Plus vs. Monster Beverage Corp |
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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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