Correlation Between Superior Plus and Svenska Cellulosa
Can any of the company-specific risk be diversified away by investing in both Superior Plus and Svenska Cellulosa 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 Svenska Cellulosa 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 Svenska Cellulosa Aktiebolaget, you can compare the effects of market volatilities on Superior Plus and Svenska Cellulosa 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 Svenska Cellulosa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Superior Plus and Svenska Cellulosa.
Diversification Opportunities for Superior Plus and Svenska Cellulosa
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Superior and Svenska is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Superior Plus Corp and Svenska Cellulosa Aktiebolaget in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Svenska Cellulosa 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 Svenska Cellulosa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Svenska Cellulosa has no effect on the direction of Superior Plus i.e., Superior Plus and Svenska Cellulosa go up and down completely randomly.
Pair Corralation between Superior Plus and Svenska Cellulosa
Assuming the 90 days horizon Superior Plus Corp is expected to under-perform the Svenska Cellulosa. In addition to that, Superior Plus is 1.32 times more volatile than Svenska Cellulosa Aktiebolaget. It trades about -0.16 of its total potential returns per unit of risk. Svenska Cellulosa Aktiebolaget is currently generating about 0.11 per unit of volatility. If you would invest 1,289 in Svenska Cellulosa Aktiebolaget on November 28, 2024 and sell it today you would earn a total of 36.00 from holding Svenska Cellulosa Aktiebolaget or generate 2.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Superior Plus Corp vs. Svenska Cellulosa Aktiebolaget
Performance |
| Timeline |
| Superior Plus Corp |
| Svenska Cellulosa |
Superior Plus and Svenska Cellulosa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Superior Plus and Svenska Cellulosa
The main advantage of trading using opposite Superior Plus and Svenska Cellulosa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Superior Plus position performs unexpectedly, Svenska Cellulosa 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 Svenska Cellulosa will offset losses from the drop in Svenska Cellulosa's long position.| Superior Plus vs. Fast Retailing Co | Superior Plus vs. RETAIL FOOD GROUP | Superior Plus vs. AEON STORES | Superior Plus vs. CARSALESCOM |
| Svenska Cellulosa vs. United Utilities Group | Svenska Cellulosa vs. G III APPAREL GROUP | Svenska Cellulosa vs. SCANSOURCE | Svenska Cellulosa vs. Urban Outfitters |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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