Correlation Between Ceres Power and Superior Plus
Can any of the company-specific risk be diversified away by investing in both Ceres Power and Superior Plus 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 Ceres Power and Superior Plus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ceres Power Holdings and Superior Plus Corp, you can compare the effects of market volatilities on Ceres Power and Superior Plus 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 Ceres Power with a short position of Superior Plus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ceres Power and Superior Plus.
Diversification Opportunities for Ceres Power and Superior Plus
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ceres and Superior is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Ceres Power Holdings and Superior Plus Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Superior Plus Corp and Ceres Power 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 Ceres Power Holdings are associated (or correlated) with Superior Plus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Superior Plus Corp has no effect on the direction of Ceres Power i.e., Ceres Power and Superior Plus go up and down completely randomly.
Pair Corralation between Ceres Power and Superior Plus
Assuming the 90 days trading horizon Ceres Power Holdings is expected to under-perform the Superior Plus. In addition to that, Ceres Power is 1.75 times more volatile than Superior Plus Corp. It trades about -0.01 of its total potential returns per unit of risk. Superior Plus Corp is currently generating about 0.15 per unit of volatility. If you would invest 416.00 in Superior Plus Corp on September 14, 2024 and sell it today you would earn a total of 28.00 from holding Superior Plus Corp or generate 6.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ceres Power Holdings vs. Superior Plus Corp
Performance |
| Timeline |
| Ceres Power Holdings |
| Superior Plus Corp |
Ceres Power and Superior Plus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ceres Power and Superior Plus
The main advantage of trading using opposite Ceres Power and Superior Plus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ceres Power position performs unexpectedly, Superior Plus 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 Superior Plus will offset losses from the drop in Superior Plus' long position.| Ceres Power vs. Superior Plus Corp | Ceres Power vs. SIVERS SEMICONDUCTORS AB | Ceres Power vs. Norsk Hydro ASA | Ceres Power vs. Reliance Steel Aluminum |
| Superior Plus vs. Boiron SA | Superior Plus vs. COSMOSTEEL HLDGS | Superior Plus vs. Vastned Retail NV | Superior Plus vs. BURLINGTON STORES |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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