Correlation Between Superior Plus and CSL
Can any of the company-specific risk be diversified away by investing in both Superior Plus and CSL 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 CSL 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 CSL Limited, you can compare the effects of market volatilities on Superior Plus and CSL 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 CSL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Superior Plus and CSL.
Diversification Opportunities for Superior Plus and CSL
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Superior and CSL is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Superior Plus Corp and CSL Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSL 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 CSL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSL Limited has no effect on the direction of Superior Plus i.e., Superior Plus and CSL go up and down completely randomly.
Pair Corralation between Superior Plus and CSL
Assuming the 90 days horizon Superior Plus Corp is expected to under-perform the CSL. In addition to that, Superior Plus is 1.55 times more volatile than CSL Limited. It trades about -0.03 of its total potential returns per unit of risk. CSL Limited is currently generating about 0.01 per unit of volatility. If you would invest 17,140 in CSL Limited on August 28, 2024 and sell it today you would earn a total of 370.00 from holding CSL Limited or generate 2.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Superior Plus Corp vs. CSL Limited
Performance |
| Timeline |
| Superior Plus Corp |
| CSL Limited |
Superior Plus and CSL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Superior Plus and CSL
The main advantage of trading using opposite Superior Plus and CSL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Superior Plus position performs unexpectedly, CSL 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 CSL will offset losses from the drop in CSL'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 |
| CSL vs. Superior Plus Corp | CSL vs. NMI Holdings | CSL vs. Origin Agritech | CSL 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |