Correlation Between Superior Plus and Eisai Co
Can any of the company-specific risk be diversified away by investing in both Superior Plus and Eisai Co 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 Eisai Co 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 Eisai Co, you can compare the effects of market volatilities on Superior Plus and Eisai Co 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 Eisai Co. Check out your portfolio center. Please also check ongoing floating volatility patterns of Superior Plus and Eisai Co.
Diversification Opportunities for Superior Plus and Eisai Co
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Superior and Eisai is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Superior Plus Corp and Eisai Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eisai Co 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 Eisai Co. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eisai Co has no effect on the direction of Superior Plus i.e., Superior Plus and Eisai Co go up and down completely randomly.
Pair Corralation between Superior Plus and Eisai Co
Assuming the 90 days horizon Superior Plus Corp is expected to generate 0.85 times more return on investment than Eisai Co. However, Superior Plus Corp is 1.18 times less risky than Eisai Co. It trades about -0.03 of its potential returns per unit of risk. Eisai Co is currently generating about -0.08 per unit of risk. If you would invest 577.00 in Superior Plus Corp on September 1, 2024 and sell it today you would lose (151.00) from holding Superior Plus Corp or give up 26.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.74% |
| Values | Daily Returns |
Superior Plus Corp vs. Eisai Co
Performance |
| Timeline |
| Superior Plus Corp |
| Eisai Co |
Superior Plus and Eisai Co Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Superior Plus and Eisai Co
The main advantage of trading using opposite Superior Plus and Eisai Co positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Superior Plus position performs unexpectedly, Eisai Co 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 Eisai Co will offset losses from the drop in Eisai Co's long position.| Superior Plus vs. TSOGO SUN GAMING | Superior Plus vs. FUTURE GAMING GRP | Superior Plus vs. TROPHY GAMES DEV | Superior Plus vs. Boyd Gaming |
| Eisai Co vs. Shionogi Co | Eisai Co vs. Superior Plus Corp | Eisai Co vs. Origin Agritech | Eisai Co vs. Identiv |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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