Correlation Between Andean Silver and Super Retail
Can any of the company-specific risk be diversified away by investing in both Andean Silver 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 Andean Silver and Super Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Andean Silver Limited and Super Retail Group, you can compare the effects of market volatilities on Andean Silver 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 Andean Silver with a short position of Super Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Andean Silver and Super Retail.
Diversification Opportunities for Andean Silver and Super Retail
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Andean and Super is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Andean Silver Limited 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 Andean Silver 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 Andean Silver Limited 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 Andean Silver i.e., Andean Silver and Super Retail go up and down completely randomly.
Pair Corralation between Andean Silver and Super Retail
Assuming the 90 days trading horizon Andean Silver Limited is expected to generate 3.6 times more return on investment than Super Retail. However, Andean Silver is 3.6 times more volatile than Super Retail Group. It trades about 0.39 of its potential returns per unit of risk. Super Retail Group is currently generating about 0.11 per unit of risk. If you would invest 83.00 in Andean Silver Limited on November 7, 2024 and sell it today you would earn a total of 32.00 from holding Andean Silver Limited or generate 38.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Andean Silver Limited vs. Super Retail Group
Performance |
| Timeline |
| Andean Silver Limited |
| Super Retail Group |
Andean Silver and Super Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Andean Silver and Super Retail
The main advantage of trading using opposite Andean Silver and Super Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Andean Silver 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.| Andean Silver vs. ACDC Metals | Andean Silver vs. Dalaroo Metals | Andean Silver vs. Everest Metals | Andean Silver vs. Centrex Metals |
| Super Retail vs. Commonwealth Bank of | Super Retail vs. Latitude Financial Services | Super Retail vs. Duketon Mining | Super Retail vs. Australian Unity Office |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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