Correlation Between Superior Plus and Eskay Mining
Can any of the company-specific risk be diversified away by investing in both Superior Plus and Eskay Mining 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 Eskay Mining 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 Eskay Mining Corp, you can compare the effects of market volatilities on Superior Plus and Eskay Mining 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 Eskay Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Superior Plus and Eskay Mining.
Diversification Opportunities for Superior Plus and Eskay Mining
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Superior and Eskay is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Superior Plus Corp and Eskay Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eskay Mining Corp 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 Eskay Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eskay Mining Corp has no effect on the direction of Superior Plus i.e., Superior Plus and Eskay Mining go up and down completely randomly.
Pair Corralation between Superior Plus and Eskay Mining
Assuming the 90 days horizon Superior Plus Corp is expected to under-perform the Eskay Mining. But the stock apears to be less risky and, when comparing its historical volatility, Superior Plus Corp is 4.3 times less risky than Eskay Mining. The stock trades about -0.06 of its potential returns per unit of risk. The Eskay Mining Corp is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 9.46 in Eskay Mining Corp on September 20, 2024 and sell it today you would earn a total of 3.54 from holding Eskay Mining Corp or generate 37.42% 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. Eskay Mining Corp
Performance |
| Timeline |
| Superior Plus Corp |
| Eskay Mining Corp |
Superior Plus and Eskay Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Superior Plus and Eskay Mining
The main advantage of trading using opposite Superior Plus and Eskay Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Superior Plus position performs unexpectedly, Eskay Mining 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 Eskay Mining will offset losses from the drop in Eskay Mining's long position.| Superior Plus vs. MACOM Technology Solutions | Superior Plus vs. Playa Hotels Resorts | Superior Plus vs. Computer And Technologies | Superior Plus vs. Park Hotels Resorts |
| Eskay Mining vs. Sims Metal Management | Eskay Mining vs. Geely Automobile Holdings | Eskay Mining vs. Nok Airlines PCL | Eskay Mining vs. American Airlines Group |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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