Correlation Between Superior Plus and Universal Entertainment
Can any of the company-specific risk be diversified away by investing in both Superior Plus and Universal Entertainment 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 Universal Entertainment 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 Universal Entertainment, you can compare the effects of market volatilities on Superior Plus and Universal Entertainment 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 Universal Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Superior Plus and Universal Entertainment.
Diversification Opportunities for Superior Plus and Universal Entertainment
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Superior and Universal is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Superior Plus Corp and Universal Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Universal Entertainment 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 Universal Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Universal Entertainment has no effect on the direction of Superior Plus i.e., Superior Plus and Universal Entertainment go up and down completely randomly.
Pair Corralation between Superior Plus and Universal Entertainment
Assuming the 90 days horizon Superior Plus Corp is expected to under-perform the Universal Entertainment. But the stock apears to be less risky and, when comparing its historical volatility, Superior Plus Corp is 1.4 times less risky than Universal Entertainment. The stock trades about -0.04 of its potential returns per unit of risk. The Universal Entertainment is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 660.00 in Universal Entertainment on November 27, 2024 and sell it today you would earn a total of 10.00 from holding Universal Entertainment or generate 1.52% 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. Universal Entertainment
Performance |
| Timeline |
| Superior Plus Corp |
| Universal Entertainment |
Superior Plus and Universal Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Superior Plus and Universal Entertainment
The main advantage of trading using opposite Superior Plus and Universal Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Superior Plus position performs unexpectedly, Universal Entertainment 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 Universal Entertainment will offset losses from the drop in Universal Entertainment's long position.| Superior Plus vs. SANOK RUBBER ZY | Superior Plus vs. APPLIED MATERIALS | Superior Plus vs. WILLIS LEASE FIN | Superior Plus vs. FUYO GENERAL LEASE |
| Universal Entertainment vs. GRIFFIN MINING LTD | Universal Entertainment vs. Sumitomo Mitsui Construction | Universal Entertainment vs. GREENX METALS LTD | Universal Entertainment vs. Zijin Mining Group |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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