Correlation Between Cromwell Property and Super Retail
Can any of the company-specific risk be diversified away by investing in both Cromwell Property 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 Cromwell Property and Super Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cromwell Property Group and Super Retail Group, you can compare the effects of market volatilities on Cromwell Property 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 Cromwell Property with a short position of Super Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cromwell Property and Super Retail.
Diversification Opportunities for Cromwell Property and Super Retail
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cromwell and Super is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Cromwell Property Group 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 Cromwell Property 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 Cromwell Property Group 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 Cromwell Property i.e., Cromwell Property and Super Retail go up and down completely randomly.
Pair Corralation between Cromwell Property and Super Retail
Assuming the 90 days trading horizon Cromwell Property Group is expected to under-perform the Super Retail. In addition to that, Cromwell Property is 1.4 times more volatile than Super Retail Group. It trades about -0.01 of its total potential returns per unit of risk. Super Retail Group is currently generating about 0.06 per unit of volatility. If you would invest 1,023 in Super Retail Group on August 31, 2024 and sell it today you would earn a total of 450.00 from holding Super Retail Group or generate 43.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cromwell Property Group vs. Super Retail Group
Performance |
| Timeline |
| Cromwell Property |
| Super Retail Group |
Cromwell Property and Super Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cromwell Property and Super Retail
The main advantage of trading using opposite Cromwell Property and Super Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cromwell Property 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.| Cromwell Property vs. Centaurus Metals | Cromwell Property vs. Aurelia Metals | Cromwell Property vs. MFF Capital Investments | Cromwell Property vs. DY6 Metals |
| Super Retail vs. Aneka Tambang Tbk | Super Retail vs. Unibail Rodamco Westfield SE | Super Retail vs. Macquarie Group | Super Retail vs. Commonwealth Bank |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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