Correlation Between Superior Plus and Trip Group
Can any of the company-specific risk be diversified away by investing in both Superior Plus and Trip Group 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 Trip Group 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 Trip Group Limited, you can compare the effects of market volatilities on Superior Plus and Trip Group 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 Trip Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Superior Plus and Trip Group.
Diversification Opportunities for Superior Plus and Trip Group
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Superior and Trip is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Superior Plus Corp and Trip Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trip Group Limited 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 Trip Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trip Group Limited has no effect on the direction of Superior Plus i.e., Superior Plus and Trip Group go up and down completely randomly.
Pair Corralation between Superior Plus and Trip Group
Assuming the 90 days horizon Superior Plus Corp is expected to under-perform the Trip Group. But the stock apears to be less risky and, when comparing its historical volatility, Superior Plus Corp is 1.17 times less risky than Trip Group. The stock trades about -0.07 of its potential returns per unit of risk. The Trip Group Limited is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 4,720 in Trip Group Limited on September 2, 2024 and sell it today you would earn a total of 1,380 from holding Trip Group Limited or generate 29.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Superior Plus Corp vs. Trip Group Limited
Performance |
| Timeline |
| Superior Plus Corp |
| Trip Group Limited |
Superior Plus and Trip Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Superior Plus and Trip Group
The main advantage of trading using opposite Superior Plus and Trip Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Superior Plus position performs unexpectedly, Trip Group 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 Trip Group will offset losses from the drop in Trip Group's long position.| Superior Plus vs. TEXAS ROADHOUSE | Superior Plus vs. Broadcom | Superior Plus vs. Fukuyama Transporting Co | Superior Plus vs. Wayside Technology Group |
| Trip Group vs. Charter Communications | Trip Group vs. INTERSHOP Communications Aktiengesellschaft | Trip Group vs. WillScot Mobile Mini | Trip Group vs. Iridium Communications |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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