Correlation Between Adairs and Super Retail
Can any of the company-specific risk be diversified away by investing in both Adairs 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 Adairs and Super Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Adairs and Super Retail Group, you can compare the effects of market volatilities on Adairs 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 Adairs with a short position of Super Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adairs and Super Retail.
Diversification Opportunities for Adairs and Super Retail
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Adairs and Super is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Adairs 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 Adairs 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 Adairs 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 Adairs i.e., Adairs and Super Retail go up and down completely randomly.
Pair Corralation between Adairs and Super Retail
Assuming the 90 days trading horizon Adairs is expected to generate 1.64 times more return on investment than Super Retail. However, Adairs is 1.64 times more volatile than Super Retail Group. It trades about 0.06 of its potential returns per unit of risk. Super Retail Group is currently generating about 0.1 per unit of risk. If you would invest 258.00 in Adairs on September 4, 2024 and sell it today you would earn a total of 7.00 from holding Adairs or generate 2.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Adairs vs. Super Retail Group
Performance |
| Timeline |
| Adairs |
| Super Retail Group |
Adairs and Super Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Adairs and Super Retail
The main advantage of trading using opposite Adairs and Super Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adairs 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.| Adairs vs. Super Retail Group | Adairs vs. Steamships Trading | Adairs vs. Charter Hall Retail | Adairs vs. Farm Pride Foods |
| Super Retail vs. Accent Resources NL | Super Retail vs. Hutchison Telecommunications | Super Retail vs. Energy Resources | Super Retail vs. GO2 People |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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