Correlation Between Dillards and Superior Plus
Can any of the company-specific risk be diversified away by investing in both Dillards 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 Dillards and Superior Plus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dillards and Superior Plus Corp, you can compare the effects of market volatilities on Dillards 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 Dillards with a short position of Superior Plus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dillards and Superior Plus.
Diversification Opportunities for Dillards and Superior Plus
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Dillards and Superior is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Dillards 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 Dillards 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 Dillards 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 Dillards i.e., Dillards and Superior Plus go up and down completely randomly.
Pair Corralation between Dillards and Superior Plus
Assuming the 90 days trading horizon Dillards is expected to under-perform the Superior Plus. In addition to that, Dillards is 1.17 times more volatile than Superior Plus Corp. It trades about -0.22 of its total potential returns per unit of risk. Superior Plus Corp is currently generating about 0.13 per unit of volatility. If you would invest 398.00 in Superior Plus Corp on December 1, 2024 and sell it today you would earn a total of 26.00 from holding Superior Plus Corp or generate 6.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dillards vs. Superior Plus Corp
Performance |
| Timeline |
| Dillards |
| Superior Plus Corp |
Dillards and Superior Plus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dillards and Superior Plus
The main advantage of trading using opposite Dillards and Superior Plus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dillards 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.| Dillards vs. CITY OFFICE REIT | Dillards vs. Silicon Motion Technology | Dillards vs. Siamgas And Petrochemicals | Dillards vs. Sekisui Chemical Co |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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