Correlation Between Superior Plus and Peoples Insurance
Can any of the company-specific risk be diversified away by investing in both Superior Plus and Peoples Insurance 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 Peoples Insurance 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 The Peoples Insurance, you can compare the effects of market volatilities on Superior Plus and Peoples Insurance 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 Peoples Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Superior Plus and Peoples Insurance.
Diversification Opportunities for Superior Plus and Peoples Insurance
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Superior and Peoples is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Superior Plus Corp and The Peoples Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peoples Insurance 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 Peoples Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peoples Insurance has no effect on the direction of Superior Plus i.e., Superior Plus and Peoples Insurance go up and down completely randomly.
Pair Corralation between Superior Plus and Peoples Insurance
Assuming the 90 days horizon Superior Plus Corp is expected to under-perform the Peoples Insurance. But the stock apears to be less risky and, when comparing its historical volatility, Superior Plus Corp is 3.17 times less risky than Peoples Insurance. The stock trades about -0.07 of its potential returns per unit of risk. The The Peoples Insurance is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 11.00 in The Peoples Insurance on September 3, 2024 and sell it today you would earn a total of 27.00 from holding The Peoples Insurance or generate 245.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Superior Plus Corp vs. The Peoples Insurance
Performance |
| Timeline |
| Superior Plus Corp |
| Peoples Insurance |
Superior Plus and Peoples Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Superior Plus and Peoples Insurance
The main advantage of trading using opposite Superior Plus and Peoples Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Superior Plus position performs unexpectedly, Peoples Insurance 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 Peoples Insurance will offset losses from the drop in Peoples Insurance's long position.| Superior Plus vs. Collins Foods Limited | Superior Plus vs. Thai Beverage Public | Superior Plus vs. ADRIATIC METALS LS 013355 | Superior Plus vs. Lifeway Foods |
| Peoples Insurance vs. Loews Corp | Peoples Insurance vs. The Hanover Insurance | Peoples Insurance vs. Superior Plus Corp | Peoples Insurance vs. NMI Holdings |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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