Correlation Between Superior Plus and Gerresheimer
Can any of the company-specific risk be diversified away by investing in both Superior Plus and Gerresheimer 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 Gerresheimer 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 Gerresheimer AG, you can compare the effects of market volatilities on Superior Plus and Gerresheimer 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 Gerresheimer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Superior Plus and Gerresheimer.
Diversification Opportunities for Superior Plus and Gerresheimer
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Superior and Gerresheimer is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Superior Plus Corp and Gerresheimer AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gerresheimer AG 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 Gerresheimer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gerresheimer AG has no effect on the direction of Superior Plus i.e., Superior Plus and Gerresheimer go up and down completely randomly.
Pair Corralation between Superior Plus and Gerresheimer
Assuming the 90 days horizon Superior Plus Corp is expected to generate 2.55 times more return on investment than Gerresheimer. However, Superior Plus is 2.55 times more volatile than Gerresheimer AG. It trades about 0.03 of its potential returns per unit of risk. Gerresheimer AG is currently generating about -0.11 per unit of risk. If you would invest 424.00 in Superior Plus Corp on September 2, 2024 and sell it today you would earn a total of 4.00 from holding Superior Plus Corp or generate 0.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Superior Plus Corp vs. Gerresheimer AG
Performance |
| Timeline |
| Superior Plus Corp |
| Gerresheimer AG |
Superior Plus and Gerresheimer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Superior Plus and Gerresheimer
The main advantage of trading using opposite Superior Plus and Gerresheimer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Superior Plus position performs unexpectedly, Gerresheimer 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 Gerresheimer will offset losses from the drop in Gerresheimer's long position.| Superior Plus vs. TEXAS ROADHOUSE | Superior Plus vs. Broadcom | Superior Plus vs. Fukuyama Transporting Co | Superior Plus vs. Wayside Technology Group |
| Gerresheimer vs. ESSILORLUXOTTICA 12ON | Gerresheimer vs. Intuitive Surgical | Gerresheimer vs. EssilorLuxottica Socit anonyme | Gerresheimer vs. HOYA Corporation |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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