Correlation Between H2O Retailing and Superior Plus
Can any of the company-specific risk be diversified away by investing in both H2O Retailing 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 H2O Retailing and Superior Plus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between H2O Retailing and Superior Plus Corp, you can compare the effects of market volatilities on H2O Retailing 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 H2O Retailing with a short position of Superior Plus. Check out your portfolio center. Please also check ongoing floating volatility patterns of H2O Retailing and Superior Plus.
Diversification Opportunities for H2O Retailing and Superior Plus
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between H2O and Superior is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding H2O Retailing 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 H2O Retailing 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 H2O Retailing 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 H2O Retailing i.e., H2O Retailing and Superior Plus go up and down completely randomly.
Pair Corralation between H2O Retailing and Superior Plus
Assuming the 90 days horizon H2O Retailing is expected to generate 0.77 times more return on investment than Superior Plus. However, H2O Retailing is 1.3 times less risky than Superior Plus. It trades about 0.08 of its potential returns per unit of risk. Superior Plus Corp is currently generating about -0.03 per unit of risk. If you would invest 1,400 in H2O Retailing on November 2, 2024 and sell it today you would earn a total of 30.00 from holding H2O Retailing or generate 2.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
H2O Retailing vs. Superior Plus Corp
Performance |
| Timeline |
| H2O Retailing |
| Superior Plus Corp |
H2O Retailing and Superior Plus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with H2O Retailing and Superior Plus
The main advantage of trading using opposite H2O Retailing and Superior Plus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if H2O Retailing 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.| H2O Retailing vs. DISTRICT METALS | H2O Retailing vs. GREENX METALS LTD | H2O Retailing vs. Nucletron Electronic Aktiengesellschaft | H2O Retailing vs. Kaiser Aluminum |
| Superior Plus vs. Siemens Healthineers AG | Superior Plus vs. Acadia Healthcare | Superior Plus vs. GigaMedia | Superior Plus vs. OPKO HEALTH |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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