Correlation Between Superior Plus and FirstGroup Plc
Can any of the company-specific risk be diversified away by investing in both Superior Plus and FirstGroup Plc 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 FirstGroup Plc 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 FirstGroup plc, you can compare the effects of market volatilities on Superior Plus and FirstGroup Plc 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 FirstGroup Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Superior Plus and FirstGroup Plc.
Diversification Opportunities for Superior Plus and FirstGroup Plc
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Superior and FirstGroup is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Superior Plus Corp and FirstGroup plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FirstGroup plc 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 FirstGroup Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FirstGroup plc has no effect on the direction of Superior Plus i.e., Superior Plus and FirstGroup Plc go up and down completely randomly.
Pair Corralation between Superior Plus and FirstGroup Plc
Assuming the 90 days horizon Superior Plus Corp is expected to under-perform the FirstGroup Plc. In addition to that, Superior Plus is 1.11 times more volatile than FirstGroup plc. It trades about -0.01 of its total potential returns per unit of risk. FirstGroup plc is currently generating about 0.06 per unit of volatility. If you would invest 110.00 in FirstGroup plc on September 12, 2024 and sell it today you would earn a total of 76.00 from holding FirstGroup plc or generate 69.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Superior Plus Corp vs. FirstGroup plc
Performance |
| Timeline |
| Superior Plus Corp |
| FirstGroup plc |
Superior Plus and FirstGroup Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Superior Plus and FirstGroup Plc
The main advantage of trading using opposite Superior Plus and FirstGroup Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Superior Plus position performs unexpectedly, FirstGroup Plc 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 FirstGroup Plc will offset losses from the drop in FirstGroup Plc's long position.| Superior Plus vs. AIR PRODCHEMICALS | Superior Plus vs. Suntory Beverage Food | Superior Plus vs. Molson Coors Beverage | Superior Plus vs. Monster Beverage Corp |
| FirstGroup Plc vs. SCHNEIDER NATLINC CLB | FirstGroup Plc vs. Fukuyama Transporting Co | FirstGroup Plc vs. Superior Plus Corp | FirstGroup Plc 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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