Correlation Between Superior Plus and Booking Holdings
Can any of the company-specific risk be diversified away by investing in both Superior Plus and Booking Holdings 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 Booking Holdings 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 Booking Holdings, you can compare the effects of market volatilities on Superior Plus and Booking Holdings 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 Booking Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Superior Plus and Booking Holdings.
Diversification Opportunities for Superior Plus and Booking Holdings
-0.88 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Superior and Booking is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding Superior Plus Corp and Booking Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Booking Holdings 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 Booking Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Booking Holdings has no effect on the direction of Superior Plus i.e., Superior Plus and Booking Holdings go up and down completely randomly.
Pair Corralation between Superior Plus and Booking Holdings
Assuming the 90 days horizon Superior Plus Corp is expected to under-perform the Booking Holdings. In addition to that, Superior Plus is 1.15 times more volatile than Booking Holdings. It trades about -0.02 of its total potential returns per unit of risk. Booking Holdings is currently generating about 0.11 per unit of volatility. If you would invest 189,331 in Booking Holdings on September 2, 2024 and sell it today you would earn a total of 303,369 from holding Booking Holdings or generate 160.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Superior Plus Corp vs. Booking Holdings
Performance |
| Timeline |
| Superior Plus Corp |
| Booking Holdings |
Superior Plus and Booking Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Superior Plus and Booking Holdings
The main advantage of trading using opposite Superior Plus and Booking Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Superior Plus position performs unexpectedly, Booking Holdings 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 Booking Holdings will offset losses from the drop in Booking Holdings' long position.| Superior Plus vs. TEXAS ROADHOUSE | Superior Plus vs. Broadcom | Superior Plus vs. Fukuyama Transporting Co | Superior Plus vs. Wayside Technology Group |
| Booking Holdings vs. SOFI TECHNOLOGIES | Booking Holdings vs. AAC TECHNOLOGHLDGADR | Booking Holdings vs. Taiwan Semiconductor Manufacturing | Booking Holdings vs. Digilife Technologies Limited |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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