Correlation Between Superior Plus and C F
Can any of the company-specific risk be diversified away by investing in both Superior Plus and C F 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 C F 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 C F FINL, you can compare the effects of market volatilities on Superior Plus and C F 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 C F. Check out your portfolio center. Please also check ongoing floating volatility patterns of Superior Plus and C F.
Diversification Opportunities for Superior Plus and C F
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Superior and CFF is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Superior Plus Corp and C F FINL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on C F FINL 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 C F. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of C F FINL has no effect on the direction of Superior Plus i.e., Superior Plus and C F go up and down completely randomly.
Pair Corralation between Superior Plus and C F
Assuming the 90 days horizon Superior Plus Corp is expected to under-perform the C F. But the stock apears to be less risky and, when comparing its historical volatility, Superior Plus Corp is 1.25 times less risky than C F. The stock trades about -0.01 of its potential returns per unit of risk. The C F FINL is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 5,018 in C F FINL on September 12, 2024 and sell it today you would earn a total of 1,882 from holding C F FINL or generate 37.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Superior Plus Corp vs. C F FINL
Performance |
| Timeline |
| Superior Plus Corp |
| C F FINL |
Superior Plus and C F Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Superior Plus and C F
The main advantage of trading using opposite Superior Plus and C F positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Superior Plus position performs unexpectedly, C F 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 C F will offset losses from the drop in C F'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 |
| C F vs. POSBO UNSPADRS20YC1 | C F vs. Postal Savings Bank | C F vs. UTD OV BK LOC ADR1 | C F vs. Superior Plus Corp |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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