Correlation Between B GRIMM and Super Energy

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Can any of the company-specific risk be diversified away by investing in both B GRIMM and Super Energy 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 B GRIMM and Super Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between B GRIMM POWER and Super Energy, you can compare the effects of market volatilities on B GRIMM and Super Energy 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 B GRIMM with a short position of Super Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of B GRIMM and Super Energy.

Diversification Opportunities for B GRIMM and Super Energy

0.44
  Correlation Coefficient

Very weak diversification

The 3 months correlation between BGRIM-R and Super is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding B GRIMM POWER and Super Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Super Energy and B GRIMM 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 B GRIMM POWER are associated (or correlated) with Super Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Super Energy has no effect on the direction of B GRIMM i.e., B GRIMM and Super Energy go up and down completely randomly.

Pair Corralation between B GRIMM and Super Energy

Assuming the 90 days trading horizon B GRIMM POWER is expected to under-perform the Super Energy. In addition to that, B GRIMM is 4.13 times more volatile than Super Energy. It trades about -0.21 of its total potential returns per unit of risk. Super Energy is currently generating about 0.01 per unit of volatility. If you would invest  27.00  in Super Energy on September 14, 2024 and sell it today you would earn a total of  0.00  from holding Super Energy or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

B GRIMM POWER  vs.  Super Energy

 Performance 
       Timeline  
B GRIMM POWER 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days B GRIMM POWER has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's forward indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.
Super Energy 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Weak
Over the last 90 days Super Energy has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental drivers, Super Energy is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

B GRIMM and Super Energy Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with B GRIMM and Super Energy

The main advantage of trading using opposite B GRIMM and Super Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if B GRIMM position performs unexpectedly, Super Energy 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 Energy will offset losses from the drop in Super Energy's long position.
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The idea behind B GRIMM POWER and Super Energy pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.

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