Correlation Between Superior Plus and LOral SA
Can any of the company-specific risk be diversified away by investing in both Superior Plus and LOral SA 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 LOral SA 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 LOral SA, you can compare the effects of market volatilities on Superior Plus and LOral SA 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 LOral SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Superior Plus and LOral SA.
Diversification Opportunities for Superior Plus and LOral SA
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Superior and LOral is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Superior Plus Corp and LOral SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LOral SA 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 LOral SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LOral SA has no effect on the direction of Superior Plus i.e., Superior Plus and LOral SA go up and down completely randomly.
Pair Corralation between Superior Plus and LOral SA
Assuming the 90 days horizon Superior Plus Corp is expected to under-perform the LOral SA. In addition to that, Superior Plus is 1.52 times more volatile than LOral SA. It trades about -0.01 of its total potential returns per unit of risk. LOral SA is currently generating about 0.0 per unit of volatility. If you would invest 34,505 in LOral SA on August 30, 2024 and sell it today you would lose (1,395) from holding LOral SA or give up 4.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Superior Plus Corp vs. LOral SA
Performance |
| Timeline |
| Superior Plus Corp |
| LOral SA |
Superior Plus and LOral SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Superior Plus and LOral SA
The main advantage of trading using opposite Superior Plus and LOral SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Superior Plus position performs unexpectedly, LOral SA 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 LOral SA will offset losses from the drop in LOral SA's long position.| Superior Plus vs. HYDROFARM HLD GRP | Superior Plus vs. Titan Machinery | Superior Plus vs. GOODYEAR T RUBBER | Superior Plus vs. Sterling Construction |
| LOral SA vs. ELECTRONIC ARTS | LOral SA vs. Japan Medical Dynamic | LOral SA vs. CompuGroup Medical SE | LOral SA vs. Avanos Medical |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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