Correlation Between Superior Plus and Bilfinger
Can any of the company-specific risk be diversified away by investing in both Superior Plus and Bilfinger 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 Bilfinger 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 Bilfinger SE, you can compare the effects of market volatilities on Superior Plus and Bilfinger 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 Bilfinger. Check out your portfolio center. Please also check ongoing floating volatility patterns of Superior Plus and Bilfinger.
Diversification Opportunities for Superior Plus and Bilfinger
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Superior and Bilfinger is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Superior Plus Corp and Bilfinger SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bilfinger SE 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 Bilfinger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bilfinger SE has no effect on the direction of Superior Plus i.e., Superior Plus and Bilfinger go up and down completely randomly.
Pair Corralation between Superior Plus and Bilfinger
Assuming the 90 days horizon Superior Plus is expected to generate 1.44 times less return on investment than Bilfinger. In addition to that, Superior Plus is 1.22 times more volatile than Bilfinger SE. It trades about 0.08 of its total potential returns per unit of risk. Bilfinger SE is currently generating about 0.14 per unit of volatility. If you would invest 4,520 in Bilfinger SE on September 13, 2024 and sell it today you would earn a total of 245.00 from holding Bilfinger SE or generate 5.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Superior Plus Corp vs. Bilfinger SE
Performance |
| Timeline |
| Superior Plus Corp |
| Bilfinger SE |
Superior Plus and Bilfinger Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Superior Plus and Bilfinger
The main advantage of trading using opposite Superior Plus and Bilfinger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Superior Plus position performs unexpectedly, Bilfinger 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 Bilfinger will offset losses from the drop in Bilfinger's long position.| Superior Plus vs. HF SINCLAIR P | Superior Plus vs. PT Indofood Sukses | Superior Plus vs. SENECA FOODS A | Superior Plus vs. ScanSource |
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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 Transaction History module to view history of all your transactions and understand their impact on performance.
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