Correlation Between Superior Plus and CeoTronics
Can any of the company-specific risk be diversified away by investing in both Superior Plus and CeoTronics 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 CeoTronics 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 CeoTronics AG, you can compare the effects of market volatilities on Superior Plus and CeoTronics 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 CeoTronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Superior Plus and CeoTronics.
Diversification Opportunities for Superior Plus and CeoTronics
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Superior and CeoTronics is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Superior Plus Corp and CeoTronics AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CeoTronics 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 CeoTronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CeoTronics AG has no effect on the direction of Superior Plus i.e., Superior Plus and CeoTronics go up and down completely randomly.
Pair Corralation between Superior Plus and CeoTronics
Assuming the 90 days horizon Superior Plus Corp is expected to under-perform the CeoTronics. But the stock apears to be less risky and, when comparing its historical volatility, Superior Plus Corp is 1.16 times less risky than CeoTronics. The stock trades about -0.03 of its potential returns per unit of risk. The CeoTronics AG is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 341.00 in CeoTronics AG on August 28, 2024 and sell it today you would earn a total of 184.00 from holding CeoTronics AG or generate 53.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Superior Plus Corp vs. CeoTronics AG
Performance |
| Timeline |
| Superior Plus Corp |
| CeoTronics AG |
Superior Plus and CeoTronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Superior Plus and CeoTronics
The main advantage of trading using opposite Superior Plus and CeoTronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Superior Plus position performs unexpectedly, CeoTronics 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 CeoTronics will offset losses from the drop in CeoTronics' long position.| Superior Plus vs. Canon Marketing Japan | Superior Plus vs. CANON MARKETING JP | Superior Plus vs. KRISPY KREME DL 01 | Superior Plus vs. SIDETRADE EO 1 |
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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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