Correlation Between Superior Plus and Far East
Can any of the company-specific risk be diversified away by investing in both Superior Plus and Far East 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 Far East 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 Far East Horizon, you can compare the effects of market volatilities on Superior Plus and Far East 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 Far East. Check out your portfolio center. Please also check ongoing floating volatility patterns of Superior Plus and Far East.
Diversification Opportunities for Superior Plus and Far East
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Superior and Far is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Superior Plus Corp and Far East Horizon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Far East Horizon 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 Far East. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Far East Horizon has no effect on the direction of Superior Plus i.e., Superior Plus and Far East go up and down completely randomly.
Pair Corralation between Superior Plus and Far East
Assuming the 90 days horizon Superior Plus is expected to generate 1.84 times less return on investment than Far East. In addition to that, Superior Plus is 1.72 times more volatile than Far East Horizon. It trades about 0.0 of its total potential returns per unit of risk. Far East Horizon is currently generating about 0.01 per unit of volatility. If you would invest 63.00 in Far East Horizon on October 14, 2024 and sell it today you would earn a total of 0.00 from holding Far East Horizon or generate 0.0% 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. Far East Horizon
Performance |
| Timeline |
| Superior Plus Corp |
| Far East Horizon |
Superior Plus and Far East Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Superior Plus and Far East
The main advantage of trading using opposite Superior Plus and Far East positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Superior Plus position performs unexpectedly, Far East 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 Far East will offset losses from the drop in Far East's long position.| Superior Plus vs. GREENX METALS LTD | Superior Plus vs. Forsys Metals Corp | Superior Plus vs. American Eagle Outfitters | Superior Plus vs. G III Apparel Group |
| Far East vs. DIVERSIFIED ROYALTY | Far East vs. Federal Home Loan | Far East vs. Superior Plus Corp | Far East vs. NMI Holdings |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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