Correlation Between SHOPRITE HDGS and Superior Plus
Can any of the company-specific risk be diversified away by investing in both SHOPRITE HDGS 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 HDGS 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 HDGS ADR and Superior Plus Corp, you can compare the effects of market volatilities on SHOPRITE HDGS 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 HDGS with a short position of Superior Plus. Check out your portfolio center. Please also check ongoing floating volatility patterns of SHOPRITE HDGS and Superior Plus.
Diversification Opportunities for SHOPRITE HDGS and Superior Plus
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between SHOPRITE and Superior is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding SHOPRITE HDGS ADR 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 HDGS 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 HDGS ADR 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 HDGS i.e., SHOPRITE HDGS and Superior Plus go up and down completely randomly.
Pair Corralation between SHOPRITE HDGS and Superior Plus
Assuming the 90 days trading horizon SHOPRITE HDGS ADR is expected to generate 0.9 times more return on investment than Superior Plus. However, SHOPRITE HDGS ADR is 1.11 times less risky than Superior Plus. It trades about -0.01 of its potential returns per unit of risk. Superior Plus Corp is currently generating about -0.06 per unit of risk. If you would invest 1,450 in SHOPRITE HDGS ADR on November 4, 2024 and sell it today you would lose (10.00) from holding SHOPRITE HDGS ADR or give up 0.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SHOPRITE HDGS ADR vs. Superior Plus Corp
Performance |
| Timeline |
| SHOPRITE HDGS ADR |
| Superior Plus Corp |
SHOPRITE HDGS and Superior Plus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SHOPRITE HDGS and Superior Plus
The main advantage of trading using opposite SHOPRITE HDGS and Superior Plus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SHOPRITE HDGS 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 HDGS vs. United Natural Foods | SHOPRITE HDGS vs. Transport International Holdings | SHOPRITE HDGS vs. Yuexiu Transport Infrastructure | SHOPRITE HDGS vs. MTY Food Group |
| Superior Plus vs. ATRESMEDIA | Superior Plus vs. Flutter Entertainment PLC | Superior Plus vs. BANK OF CHINA | Superior Plus vs. Live Nation Entertainment |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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