Correlation Between Exchange Income and Superior Plus
Can any of the company-specific risk be diversified away by investing in both Exchange Income 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 Exchange Income and Superior Plus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Exchange Income and Superior Plus Corp, you can compare the effects of market volatilities on Exchange Income 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 Exchange Income with a short position of Superior Plus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exchange Income and Superior Plus.
Diversification Opportunities for Exchange Income and Superior Plus
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Exchange and Superior is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Exchange Income 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 Exchange Income 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 Exchange Income 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 Exchange Income i.e., Exchange Income and Superior Plus go up and down completely randomly.
Pair Corralation between Exchange Income and Superior Plus
Assuming the 90 days trading horizon Exchange Income is expected to generate 0.13 times more return on investment than Superior Plus. However, Exchange Income is 7.91 times less risky than Superior Plus. It trades about 0.31 of its potential returns per unit of risk. Superior Plus Corp is currently generating about -0.02 per unit of risk. If you would invest 5,442 in Exchange Income on August 28, 2024 and sell it today you would earn a total of 245.00 from holding Exchange Income or generate 4.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Exchange Income vs. Superior Plus Corp
Performance |
| Timeline |
| Exchange Income |
| Superior Plus Corp |
Exchange Income and Superior Plus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exchange Income and Superior Plus
The main advantage of trading using opposite Exchange Income and Superior Plus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exchange Income 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.| Exchange Income vs. Capital Power | Exchange Income vs. Keyera Corp | Exchange Income vs. Parkland Fuel | Exchange Income vs. TFI International |
| Superior Plus vs. Gibson Energy | Superior Plus vs. Parkland Fuel | Superior Plus vs. Mullen Group | Superior Plus vs. Keyera Corp |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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