Correlation Between Capitol Health and Super Retail
Can any of the company-specific risk be diversified away by investing in both Capitol Health 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 Capitol Health and Super Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capitol Health and Super Retail Group, you can compare the effects of market volatilities on Capitol Health 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 Capitol Health with a short position of Super Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capitol Health and Super Retail.
Diversification Opportunities for Capitol Health and Super Retail
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Capitol and Super is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Capitol Health 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 Capitol Health 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 Capitol Health 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 Capitol Health i.e., Capitol Health and Super Retail go up and down completely randomly.
Pair Corralation between Capitol Health and Super Retail
Assuming the 90 days trading horizon Capitol Health is expected to generate 1.3 times more return on investment than Super Retail. However, Capitol Health is 1.3 times more volatile than Super Retail Group. It trades about -0.14 of its potential returns per unit of risk. Super Retail Group is currently generating about -0.21 per unit of risk. If you would invest 39.00 in Capitol Health on August 25, 2024 and sell it today you would lose (3.00) from holding Capitol Health or give up 7.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capitol Health vs. Super Retail Group
Performance |
| Timeline |
| Capitol Health |
| Super Retail Group |
Capitol Health and Super Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capitol Health and Super Retail
The main advantage of trading using opposite Capitol Health and Super Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capitol Health 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.| Capitol Health vs. Inventis | Capitol Health vs. PM Capital Global | Capitol Health vs. Macquarie Group Ltd | Capitol Health vs. Wam Leaders |
| Super Retail vs. REGAL ASIAN INVESTMENTS | Super Retail vs. Qbe Insurance Group | Super Retail vs. Wt Financial Group | Super Retail vs. Kkr Credit Income |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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