Correlation Between Aristocrat Leisure and Super Retail
Can any of the company-specific risk be diversified away by investing in both Aristocrat Leisure 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 Aristocrat Leisure and Super Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aristocrat Leisure and Super Retail Group, you can compare the effects of market volatilities on Aristocrat Leisure 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 Aristocrat Leisure with a short position of Super Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aristocrat Leisure and Super Retail.
Diversification Opportunities for Aristocrat Leisure and Super Retail
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Aristocrat and Super is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Aristocrat Leisure 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 Aristocrat Leisure 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 Aristocrat Leisure 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 Aristocrat Leisure i.e., Aristocrat Leisure and Super Retail go up and down completely randomly.
Pair Corralation between Aristocrat Leisure and Super Retail
Assuming the 90 days trading horizon Aristocrat Leisure is expected to generate 0.75 times more return on investment than Super Retail. However, Aristocrat Leisure is 1.33 times less risky than Super Retail. It trades about 0.43 of its potential returns per unit of risk. Super Retail Group is currently generating about 0.05 per unit of risk. If you would invest 6,114 in Aristocrat Leisure on September 1, 2024 and sell it today you would earn a total of 661.00 from holding Aristocrat Leisure or generate 10.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aristocrat Leisure vs. Super Retail Group
Performance |
| Timeline |
| Aristocrat Leisure |
| Super Retail Group |
Aristocrat Leisure and Super Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aristocrat Leisure and Super Retail
The main advantage of trading using opposite Aristocrat Leisure and Super Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aristocrat Leisure 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.| Aristocrat Leisure vs. iShares Global Healthcare | Aristocrat Leisure vs. Australian Dairy Farms | Aristocrat Leisure vs. Adriatic Metals Plc | Aristocrat Leisure vs. Australian Agricultural |
| Super Retail vs. Audio Pixels Holdings | Super Retail vs. Iodm | Super Retail vs. Nsx | Super Retail vs. TTG Fintech |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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