Correlation Between Superior Plus and Marks
Can any of the company-specific risk be diversified away by investing in both Superior Plus and Marks 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 Marks 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 Marks and Spencer, you can compare the effects of market volatilities on Superior Plus and Marks 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 Marks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Superior Plus and Marks.
Diversification Opportunities for Superior Plus and Marks
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Superior and Marks is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Superior Plus Corp and Marks and Spencer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marks and Spencer 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 Marks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marks and Spencer has no effect on the direction of Superior Plus i.e., Superior Plus and Marks go up and down completely randomly.
Pair Corralation between Superior Plus and Marks
Assuming the 90 days horizon Superior Plus Corp is expected to under-perform the Marks. But the stock apears to be less risky and, when comparing its historical volatility, Superior Plus Corp is 1.12 times less risky than Marks. The stock trades about -0.02 of its potential returns per unit of risk. The Marks and Spencer is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 224.00 in Marks and Spencer on September 12, 2024 and sell it today you would earn a total of 250.00 from holding Marks and Spencer or generate 111.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Superior Plus Corp vs. Marks and Spencer
Performance |
| Timeline |
| Superior Plus Corp |
| Marks and Spencer |
Superior Plus and Marks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Superior Plus and Marks
The main advantage of trading using opposite Superior Plus and Marks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Superior Plus position performs unexpectedly, Marks 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 Marks will offset losses from the drop in Marks' long position.| Superior Plus vs. AIR PRODCHEMICALS | Superior Plus vs. Suntory Beverage Food | Superior Plus vs. Molson Coors Beverage | Superior Plus vs. Monster Beverage Corp |
| Marks vs. RYOHIN UNSPADR1 | Marks vs. Superior Plus Corp | Marks vs. SIVERS SEMICONDUCTORS AB | Marks vs. NorAm Drilling AS |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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