Correlation Between Advanced Braking and Super Retail
Can any of the company-specific risk be diversified away by investing in both Advanced Braking and Super Retail 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 Advanced Braking and Super Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advanced Braking Technology and Super Retail Group, you can compare the effects of market volatilities on Advanced Braking and Super Retail 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 Advanced Braking with a short position of Super Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advanced Braking and Super Retail.
Diversification Opportunities for Advanced Braking and Super Retail
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Advanced and Super is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Braking Technology and Super Retail Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Super Retail Group and Advanced Braking 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 Advanced Braking Technology are associated (or correlated) with Super Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Super Retail Group has no effect on the direction of Advanced Braking i.e., Advanced Braking and Super Retail go up and down completely randomly.
Pair Corralation between Advanced Braking and Super Retail
Assuming the 90 days trading horizon Advanced Braking Technology is expected to generate 1.43 times more return on investment than Super Retail. However, Advanced Braking is 1.43 times more volatile than Super Retail Group. It trades about 0.18 of its potential returns per unit of risk. Super Retail Group is currently generating about 0.07 per unit of risk. If you would invest 5.10 in Advanced Braking Technology on August 29, 2024 and sell it today you would earn a total of 3.80 from holding Advanced Braking Technology or generate 74.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Advanced Braking Technology vs. Super Retail Group
Performance |
| Timeline |
| Advanced Braking Tec |
| Super Retail Group |
Advanced Braking and Super Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advanced Braking and Super Retail
The main advantage of trading using opposite Advanced Braking and Super Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advanced Braking position performs unexpectedly, Super Retail 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 Super Retail will offset losses from the drop in Super Retail's long position.| Advanced Braking vs. Summit Resources Limited | Advanced Braking vs. Champion Iron | Advanced Braking vs. Ridley | Advanced Braking vs. Peel Mining |
| Super Retail vs. Readytech Holdings | Super Retail vs. IDP Education | Super Retail vs. Richmond Vanadium Technology | Super Retail vs. Kip McGrath Education |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data |