Correlation Between Superior Plus and China Overseas
Can any of the company-specific risk be diversified away by investing in both Superior Plus and China Overseas 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 China Overseas 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 China Overseas Land, you can compare the effects of market volatilities on Superior Plus and China Overseas 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 China Overseas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Superior Plus and China Overseas.
Diversification Opportunities for Superior Plus and China Overseas
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Superior and China is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Superior Plus Corp and China Overseas Land in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Overseas Land 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 China Overseas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Overseas Land has no effect on the direction of Superior Plus i.e., Superior Plus and China Overseas go up and down completely randomly.
Pair Corralation between Superior Plus and China Overseas
Assuming the 90 days horizon Superior Plus Corp is expected to generate 1.17 times more return on investment than China Overseas. However, Superior Plus is 1.17 times more volatile than China Overseas Land. It trades about 0.08 of its potential returns per unit of risk. China Overseas Land is currently generating about -0.04 per unit of risk. If you would invest 426.00 in Superior Plus Corp on September 13, 2024 and sell it today you would earn a total of 14.00 from holding Superior Plus Corp or generate 3.29% 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. China Overseas Land
Performance |
| Timeline |
| Superior Plus Corp |
| China Overseas Land |
Superior Plus and China Overseas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Superior Plus and China Overseas
The main advantage of trading using opposite Superior Plus and China Overseas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Superior Plus position performs unexpectedly, China Overseas 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 China Overseas will offset losses from the drop in China Overseas' long position.| Superior Plus vs. HF SINCLAIR P | Superior Plus vs. PT Indofood Sukses | Superior Plus vs. SENECA FOODS A | Superior Plus vs. ScanSource |
| China Overseas vs. Live Nation Entertainment | China Overseas vs. United Airlines Holdings | China Overseas vs. Gol Intelligent Airlines | China Overseas vs. ATRYS HEALTH SA |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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