Correlation Between Superior Plus and RENTOKIL INITIAL
Can any of the company-specific risk be diversified away by investing in both Superior Plus and RENTOKIL INITIAL 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 RENTOKIL INITIAL 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 RENTOKIL INITIAL ADR5, you can compare the effects of market volatilities on Superior Plus and RENTOKIL INITIAL 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 RENTOKIL INITIAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Superior Plus and RENTOKIL INITIAL.
Diversification Opportunities for Superior Plus and RENTOKIL INITIAL
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Superior and RENTOKIL is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Superior Plus Corp and RENTOKIL INITIAL ADR5 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RENTOKIL INITIAL ADR5 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 RENTOKIL INITIAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RENTOKIL INITIAL ADR5 has no effect on the direction of Superior Plus i.e., Superior Plus and RENTOKIL INITIAL go up and down completely randomly.
Pair Corralation between Superior Plus and RENTOKIL INITIAL
Assuming the 90 days horizon Superior Plus Corp is expected to generate 1.01 times more return on investment than RENTOKIL INITIAL. However, Superior Plus is 1.01 times more volatile than RENTOKIL INITIAL ADR5. It trades about -0.03 of its potential returns per unit of risk. RENTOKIL INITIAL ADR5 is currently generating about -0.08 per unit of risk. If you would invest 439.00 in Superior Plus Corp on October 12, 2024 and sell it today you would lose (7.00) from holding Superior Plus Corp or give up 1.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Superior Plus Corp vs. RENTOKIL INITIAL ADR5
Performance |
| Timeline |
| Superior Plus Corp |
| RENTOKIL INITIAL ADR5 |
Superior Plus and RENTOKIL INITIAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Superior Plus and RENTOKIL INITIAL
The main advantage of trading using opposite Superior Plus and RENTOKIL INITIAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Superior Plus position performs unexpectedly, RENTOKIL INITIAL 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 RENTOKIL INITIAL will offset losses from the drop in RENTOKIL INITIAL's long position.| Superior Plus vs. Urban Outfitters | Superior Plus vs. BII Railway Transportation | Superior Plus vs. Perdoceo Education | Superior Plus vs. G III Apparel Group |
| RENTOKIL INITIAL vs. Cintas | RENTOKIL INITIAL vs. Transcontinental | RENTOKIL INITIAL vs. Superior Plus Corp | RENTOKIL INITIAL 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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