Correlation Between Superior Plus and Continental
Can any of the company-specific risk be diversified away by investing in both Superior Plus and Continental 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 Continental 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 Camden Property Trust, you can compare the effects of market volatilities on Superior Plus and Continental 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 Continental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Superior Plus and Continental.
Diversification Opportunities for Superior Plus and Continental
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Superior and Continental is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Superior Plus Corp and Camden Property Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Camden Property Trust 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 Continental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Camden Property Trust has no effect on the direction of Superior Plus i.e., Superior Plus and Continental go up and down completely randomly.
Pair Corralation between Superior Plus and Continental
Assuming the 90 days horizon Superior Plus Corp is expected to generate 2.47 times more return on investment than Continental. However, Superior Plus is 2.47 times more volatile than Camden Property Trust. It trades about 0.01 of its potential returns per unit of risk. Camden Property Trust is currently generating about 0.0 per unit of risk. If you would invest 423.00 in Superior Plus Corp on October 26, 2024 and sell it today you would lose (7.00) from holding Superior Plus Corp or give up 1.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Superior Plus Corp vs. Camden Property Trust
Performance |
| Timeline |
| Superior Plus Corp |
| Camden Property Trust |
Superior Plus and Continental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Superior Plus and Continental
The main advantage of trading using opposite Superior Plus and Continental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Superior Plus position performs unexpectedly, Continental 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 Continental will offset losses from the drop in Continental's long position.| Superior Plus vs. Easy Software AG | Superior Plus vs. Iridium Communications | Superior Plus vs. FANDIFI TECHNOLOGY P | Superior Plus vs. Siamgas And Petrochemicals |
| Continental vs. Insteel Industries | Continental vs. CALTAGIRONE EDITORE | Continental vs. ANGANG STEEL H | Continental vs. Computershare Limited |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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