Correlation Between Superior Plus and CITIC
Can any of the company-specific risk be diversified away by investing in both Superior Plus and CITIC 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 CITIC 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 CITIC LTD ADR5, you can compare the effects of market volatilities on Superior Plus and CITIC 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 CITIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Superior Plus and CITIC.
Diversification Opportunities for Superior Plus and CITIC
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Superior and CITIC is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Superior Plus Corp and CITIC LTD ADR5 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CITIC LTD ADR5 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 CITIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CITIC LTD ADR5 has no effect on the direction of Superior Plus i.e., Superior Plus and CITIC go up and down completely randomly.
Pair Corralation between Superior Plus and CITIC
Assuming the 90 days horizon Superior Plus Corp is expected to generate 2.32 times more return on investment than CITIC. However, Superior Plus is 2.32 times more volatile than CITIC LTD ADR5. It trades about -0.01 of its potential returns per unit of risk. CITIC LTD ADR5 is currently generating about -0.11 per unit of risk. If you would invest 428.00 in Superior Plus Corp on August 29, 2024 and sell it today you would lose (18.00) from holding Superior Plus Corp or give up 4.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Superior Plus Corp vs. CITIC LTD ADR5
Performance |
| Timeline |
| Superior Plus Corp |
| CITIC LTD ADR5 |
Superior Plus and CITIC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Superior Plus and CITIC
The main advantage of trading using opposite Superior Plus and CITIC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Superior Plus position performs unexpectedly, CITIC 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 CITIC will offset losses from the drop in CITIC's 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 |
| CITIC vs. Superior Plus Corp | CITIC vs. NMI Holdings | CITIC vs. Origin Agritech | CITIC vs. SIVERS SEMICONDUCTORS AB |
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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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