Correlation Between Superior Plus and Great West
Can any of the company-specific risk be diversified away by investing in both Superior Plus and Great West 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 Great West 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 Great West Lifeco, you can compare the effects of market volatilities on Superior Plus and Great West 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 Great West. Check out your portfolio center. Please also check ongoing floating volatility patterns of Superior Plus and Great West.
Diversification Opportunities for Superior Plus and Great West
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Superior and Great is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Superior Plus Corp and Great West Lifeco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great West Lifeco 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 Great West. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great West Lifeco has no effect on the direction of Superior Plus i.e., Superior Plus and Great West go up and down completely randomly.
Pair Corralation between Superior Plus and Great West
Assuming the 90 days horizon Superior Plus Corp is expected to generate 1.9 times more return on investment than Great West. However, Superior Plus is 1.9 times more volatile than Great West Lifeco. It trades about 0.08 of its potential returns per unit of risk. Great West Lifeco is currently generating about 0.0 per unit of risk. If you would invest 426.00 in Superior Plus Corp on September 13, 2024 and sell it today you would earn a total of 14.00 from holding Superior Plus Corp or generate 3.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Superior Plus Corp vs. Great West Lifeco
Performance |
| Timeline |
| Superior Plus Corp |
| Great West Lifeco |
Superior Plus and Great West Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Superior Plus and Great West
The main advantage of trading using opposite Superior Plus and Great West positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Superior Plus position performs unexpectedly, Great West 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 Great West will offset losses from the drop in Great West'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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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