Correlation Between Credit Corp and Suncorp
Can any of the company-specific risk be diversified away by investing in both Credit Corp and Suncorp 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 Credit Corp and Suncorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Credit Corp Group and Suncorp Group, you can compare the effects of market volatilities on Credit Corp and Suncorp 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 Credit Corp with a short position of Suncorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Credit Corp and Suncorp.
Diversification Opportunities for Credit Corp and Suncorp
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Credit and Suncorp is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Credit Corp Group and Suncorp Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Suncorp Group and Credit Corp 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 Credit Corp Group are associated (or correlated) with Suncorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Suncorp Group has no effect on the direction of Credit Corp i.e., Credit Corp and Suncorp go up and down completely randomly.
Pair Corralation between Credit Corp and Suncorp
Assuming the 90 days trading horizon Credit Corp is expected to generate 1.89 times less return on investment than Suncorp. In addition to that, Credit Corp is 1.3 times more volatile than Suncorp Group. It trades about 0.09 of its total potential returns per unit of risk. Suncorp Group is currently generating about 0.21 per unit of volatility. If you would invest 1,829 in Suncorp Group on August 30, 2024 and sell it today you would earn a total of 113.00 from holding Suncorp Group or generate 6.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Credit Corp Group vs. Suncorp Group
Performance |
| Timeline |
| Credit Corp Group |
| Suncorp Group |
Credit Corp and Suncorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Credit Corp and Suncorp
The main advantage of trading using opposite Credit Corp and Suncorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Credit Corp position performs unexpectedly, Suncorp 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 Suncorp will offset losses from the drop in Suncorp's long position.| Credit Corp vs. ARN Media Limited | Credit Corp vs. Kneomedia | Credit Corp vs. AiMedia Technologies | Credit Corp vs. Hotel Property Investments |
| Suncorp vs. Hotel Property Investments | Suncorp vs. Perseus Mining | Suncorp vs. Auctus Alternative Investments | Suncorp vs. Centaurus Metals |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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