Correlation Between Hays Plc and Superior Plus
Can any of the company-specific risk be diversified away by investing in both Hays Plc 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 Hays Plc and Superior Plus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hays plc and Superior Plus Corp, you can compare the effects of market volatilities on Hays Plc 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 Hays Plc with a short position of Superior Plus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hays Plc and Superior Plus.
Diversification Opportunities for Hays Plc and Superior Plus
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hays and Superior is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Hays plc 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 Hays Plc 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 Hays plc 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 Hays Plc i.e., Hays Plc and Superior Plus go up and down completely randomly.
Pair Corralation between Hays Plc and Superior Plus
Assuming the 90 days horizon Hays plc is expected to generate 1.29 times more return on investment than Superior Plus. However, Hays Plc is 1.29 times more volatile than Superior Plus Corp. It trades about -0.01 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 126.00 in Hays plc on September 2, 2024 and sell it today you would lose (32.00) from holding Hays plc or give up 25.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hays plc vs. Superior Plus Corp
Performance |
| Timeline |
| Hays plc |
| Superior Plus Corp |
Hays Plc and Superior Plus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hays Plc and Superior Plus
The main advantage of trading using opposite Hays Plc and Superior Plus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hays Plc 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.| Hays Plc vs. National Bank Holdings | Hays Plc vs. SEI INVESTMENTS | Hays Plc vs. EAT WELL INVESTMENT | Hays Plc vs. SLR Investment Corp |
| Superior Plus vs. TEXAS ROADHOUSE | Superior Plus vs. Broadcom | Superior Plus vs. Fukuyama Transporting Co | Superior Plus vs. Wayside Technology Group |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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