Correlation Between Shoprite Holdings and Superior Plus
Can any of the company-specific risk be diversified away by investing in both Shoprite Holdings 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 Shoprite Holdings and Superior Plus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shoprite Holdings Limited and Superior Plus Corp, you can compare the effects of market volatilities on Shoprite Holdings 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 Shoprite Holdings with a short position of Superior Plus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shoprite Holdings and Superior Plus.
Diversification Opportunities for Shoprite Holdings and Superior Plus
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Shoprite and Superior is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Shoprite Holdings Limited 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 Shoprite Holdings 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 Shoprite Holdings Limited 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 Shoprite Holdings i.e., Shoprite Holdings and Superior Plus go up and down completely randomly.
Pair Corralation between Shoprite Holdings and Superior Plus
Assuming the 90 days horizon Shoprite Holdings Limited is expected to under-perform the Superior Plus. But the stock apears to be less risky and, when comparing its historical volatility, Shoprite Holdings Limited is 3.18 times less risky than Superior Plus. The stock trades about -0.01 of its potential returns per unit of risk. The Superior Plus Corp is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 426.00 in Superior Plus Corp on September 1, 2024 and sell it today you would earn a total of 2.00 from holding Superior Plus Corp or generate 0.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Shoprite Holdings Limited vs. Superior Plus Corp
Performance |
| Timeline |
| Shoprite Holdings |
| Superior Plus Corp |
Shoprite Holdings and Superior Plus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shoprite Holdings and Superior Plus
The main advantage of trading using opposite Shoprite Holdings and Superior Plus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shoprite Holdings 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.| Shoprite Holdings vs. AIR PRODCHEMICALS | Shoprite Holdings vs. PTT Global Chemical | Shoprite Holdings vs. Silicon Motion Technology | Shoprite Holdings vs. BRIT AMER TOBACCO |
| Superior Plus vs. TSOGO SUN GAMING | Superior Plus vs. FUTURE GAMING GRP | Superior Plus vs. TROPHY GAMES DEV | Superior Plus vs. Boyd Gaming |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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