Correlation Between Superior Plus and Ceres Power
Can any of the company-specific risk be diversified away by investing in both Superior Plus and Ceres Power 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 Ceres Power 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 Ceres Power Holdings, you can compare the effects of market volatilities on Superior Plus and Ceres Power 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 Ceres Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Superior Plus and Ceres Power.
Diversification Opportunities for Superior Plus and Ceres Power
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Superior and Ceres is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Superior Plus Corp and Ceres Power Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ceres Power Holdings 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 Ceres Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ceres Power Holdings has no effect on the direction of Superior Plus i.e., Superior Plus and Ceres Power go up and down completely randomly.
Pair Corralation between Superior Plus and Ceres Power
Assuming the 90 days horizon Superior Plus Corp is expected to under-perform the Ceres Power. But the stock apears to be less risky and, when comparing its historical volatility, Superior Plus Corp is 2.56 times less risky than Ceres Power. The stock trades about -0.03 of its potential returns per unit of risk. The Ceres Power Holdings is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 459.00 in Ceres Power Holdings on September 3, 2024 and sell it today you would lose (266.00) from holding Ceres Power Holdings or give up 57.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Superior Plus Corp vs. Ceres Power Holdings
Performance |
| Timeline |
| Superior Plus Corp |
| Ceres Power Holdings |
Superior Plus and Ceres Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Superior Plus and Ceres Power
The main advantage of trading using opposite Superior Plus and Ceres Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Superior Plus position performs unexpectedly, Ceres Power 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 Ceres Power will offset losses from the drop in Ceres Power's long position.| Superior Plus vs. Collins Foods Limited | Superior Plus vs. Thai Beverage Public | Superior Plus vs. ADRIATIC METALS LS 013355 | Superior Plus vs. Lifeway Foods |
| Ceres Power vs. ON SEMICONDUCTOR | Ceres Power vs. Taiwan Semiconductor Manufacturing | Ceres Power vs. Nordic Semiconductor ASA | Ceres Power vs. COPLAND ROAD CAPITAL |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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