Correlation Between Superior Plus and UFP Industries
Can any of the company-specific risk be diversified away by investing in both Superior Plus and UFP Industries 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 UFP Industries 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 UFP Industries, you can compare the effects of market volatilities on Superior Plus and UFP Industries 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 UFP Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Superior Plus and UFP Industries.
Diversification Opportunities for Superior Plus and UFP Industries
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Superior and UFP is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Superior Plus Corp and UFP Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UFP Industries 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 UFP Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UFP Industries has no effect on the direction of Superior Plus i.e., Superior Plus and UFP Industries go up and down completely randomly.
Pair Corralation between Superior Plus and UFP Industries
Assuming the 90 days horizon Superior Plus Corp is expected to under-perform the UFP Industries. In addition to that, Superior Plus is 1.05 times more volatile than UFP Industries. It trades about -0.01 of its total potential returns per unit of risk. UFP Industries is currently generating about 0.06 per unit of volatility. If you would invest 7,468 in UFP Industries on August 30, 2024 and sell it today you would earn a total of 5,527 from holding UFP Industries or generate 74.01% 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. UFP Industries
Performance |
| Timeline |
| Superior Plus Corp |
| UFP Industries |
Superior Plus and UFP Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Superior Plus and UFP Industries
The main advantage of trading using opposite Superior Plus and UFP Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Superior Plus position performs unexpectedly, UFP Industries 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 UFP Industries will offset losses from the drop in UFP Industries' long position.| Superior Plus vs. HYDROFARM HLD GRP | Superior Plus vs. Titan Machinery | Superior Plus vs. GOODYEAR T RUBBER | Superior Plus vs. Sterling Construction |
| UFP Industries vs. Svenska Cellulosa Aktiebolaget | UFP Industries vs. Superior Plus Corp | UFP Industries vs. NMI Holdings | UFP Industries 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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