Correlation Between EP Financial and Suncorp
Can any of the company-specific risk be diversified away by investing in both EP Financial 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 EP Financial and Suncorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EP Financial Group and Suncorp Group, you can compare the effects of market volatilities on EP Financial 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 EP Financial with a short position of Suncorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of EP Financial and Suncorp.
Diversification Opportunities for EP Financial and Suncorp
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between EP1 and Suncorp is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding EP Financial Group and Suncorp Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Suncorp Group and EP Financial 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 EP Financial 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 EP Financial i.e., EP Financial and Suncorp go up and down completely randomly.
Pair Corralation between EP Financial and Suncorp
Assuming the 90 days trading horizon EP Financial is expected to generate 1.05 times less return on investment than Suncorp. In addition to that, EP Financial is 2.19 times more volatile than Suncorp Group. It trades about 0.15 of its total potential returns per unit of risk. Suncorp Group is currently generating about 0.35 per unit of volatility. If you would invest 1,792 in Suncorp Group on September 1, 2024 and sell it today you would earn a total of 178.00 from holding Suncorp Group or generate 9.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
EP Financial Group vs. Suncorp Group
Performance |
| Timeline |
| EP Financial Group |
| Suncorp Group |
EP Financial and Suncorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EP Financial and Suncorp
The main advantage of trading using opposite EP Financial and Suncorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EP Financial 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.| EP Financial vs. Navigator Global Investments | EP Financial vs. Collins Foods | EP Financial vs. Hotel Property Investments | EP Financial vs. Queste Communications |
| Suncorp vs. EP Financial Group | Suncorp vs. Super Retail Group | Suncorp vs. Macquarie Bank Limited | Suncorp vs. Kkr Credit Income |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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