Correlation Between Superior Plus and Neste Oyj
Can any of the company-specific risk be diversified away by investing in both Superior Plus and Neste Oyj 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 Neste Oyj 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 Neste Oyj, you can compare the effects of market volatilities on Superior Plus and Neste Oyj 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 Neste Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Superior Plus and Neste Oyj.
Diversification Opportunities for Superior Plus and Neste Oyj
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Superior and Neste is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Superior Plus Corp and Neste Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neste Oyj 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 Neste Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neste Oyj has no effect on the direction of Superior Plus i.e., Superior Plus and Neste Oyj go up and down completely randomly.
Pair Corralation between Superior Plus and Neste Oyj
Assuming the 90 days horizon Superior Plus Corp is expected to generate 0.84 times more return on investment than Neste Oyj. However, Superior Plus Corp is 1.19 times less risky than Neste Oyj. It trades about -0.06 of its potential returns per unit of risk. Neste Oyj is currently generating about -0.08 per unit of risk. If you would invest 596.00 in Superior Plus Corp on September 1, 2024 and sell it today you would lose (170.00) from holding Superior Plus Corp or give up 28.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.48% |
| Values | Daily Returns |
Superior Plus Corp vs. Neste Oyj
Performance |
| Timeline |
| Superior Plus Corp |
| Neste Oyj |
Superior Plus and Neste Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Superior Plus and Neste Oyj
The main advantage of trading using opposite Superior Plus and Neste Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Superior Plus position performs unexpectedly, Neste Oyj 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 Neste Oyj will offset losses from the drop in Neste Oyj's long position.| Superior Plus vs. TSOGO SUN GAMING | Superior Plus vs. FUTURE GAMING GRP | Superior Plus vs. TROPHY GAMES DEV | Superior Plus vs. Boyd Gaming |
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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