Correlation Between Superior Plus and Starbucks
Can any of the company-specific risk be diversified away by investing in both Superior Plus and Starbucks 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 Starbucks 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 Starbucks, you can compare the effects of market volatilities on Superior Plus and Starbucks 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 Starbucks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Superior Plus and Starbucks.
Diversification Opportunities for Superior Plus and Starbucks
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Superior and Starbucks is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Superior Plus Corp and Starbucks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Starbucks 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 Starbucks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Starbucks has no effect on the direction of Superior Plus i.e., Superior Plus and Starbucks go up and down completely randomly.
Pair Corralation between Superior Plus and Starbucks
Assuming the 90 days horizon Superior Plus Corp is expected to under-perform the Starbucks. In addition to that, Superior Plus is 3.18 times more volatile than Starbucks. It trades about -0.01 of its total potential returns per unit of risk. Starbucks is currently generating about 0.22 per unit of volatility. If you would invest 9,053 in Starbucks on August 27, 2024 and sell it today you would earn a total of 673.00 from holding Starbucks or generate 7.43% 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. Starbucks
Performance |
| Timeline |
| Superior Plus Corp |
| Starbucks |
Superior Plus and Starbucks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Superior Plus and Starbucks
The main advantage of trading using opposite Superior Plus and Starbucks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Superior Plus position performs unexpectedly, Starbucks 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 Starbucks will offset losses from the drop in Starbucks' long position.| Superior Plus vs. CDL INVESTMENT | Superior Plus vs. ECHO INVESTMENT ZY | Superior Plus vs. SEI INVESTMENTS | Superior Plus vs. Gruppo Mutuionline SpA |
| Starbucks vs. Superior Plus Corp | Starbucks vs. NMI Holdings | Starbucks vs. Origin Agritech | Starbucks vs. SIVERS SEMICONDUCTORS AB |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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