Correlation Between American International and Superior Plus
Can any of the company-specific risk be diversified away by investing in both American International and Superior Plus 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 American International and Superior Plus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American International Group and Superior Plus Corp, you can compare the effects of market volatilities on American International and Superior Plus 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 American International with a short position of Superior Plus. Check out your portfolio center. Please also check ongoing floating volatility patterns of American International and Superior Plus.
Diversification Opportunities for American International and Superior Plus
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between American and Superior is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding American International Group and Superior Plus Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Superior Plus Corp and American International 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 American International Group are associated (or correlated) with Superior Plus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Superior Plus Corp has no effect on the direction of American International i.e., American International and Superior Plus go up and down completely randomly.
Pair Corralation between American International and Superior Plus
Assuming the 90 days trading horizon American International Group is expected to under-perform the Superior Plus. But the stock apears to be less risky and, when comparing its historical volatility, American International Group is 2.06 times less risky than Superior Plus. The stock trades about -0.14 of its potential returns per unit of risk. The Superior Plus Corp is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 410.00 in Superior Plus Corp on September 15, 2024 and sell it today you would earn a total of 34.00 from holding Superior Plus Corp or generate 8.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
American International Group vs. Superior Plus Corp
Performance |
| Timeline |
| American International |
| Superior Plus Corp |
American International and Superior Plus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American International and Superior Plus
The main advantage of trading using opposite American International and Superior Plus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American International position performs unexpectedly, Superior Plus 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 Superior Plus will offset losses from the drop in Superior Plus' long position.| American International vs. Superior Plus Corp | American International vs. SIVERS SEMICONDUCTORS AB | American International vs. CHINA HUARONG ENERHD 50 | American International vs. NORDIC HALIBUT AS |
| Superior Plus vs. Nissan Chemical Corp | Superior Plus vs. Japan Medical Dynamic | Superior Plus vs. Sanyo Chemical Industries | Superior Plus vs. MeVis Medical Solutions |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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