Correlation Between Land Homes and Super Retail
Can any of the company-specific risk be diversified away by investing in both Land Homes and Super Retail 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 Land Homes and Super Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Land Homes Group and Super Retail Group, you can compare the effects of market volatilities on Land Homes and Super Retail 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 Land Homes with a short position of Super Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Land Homes and Super Retail.
Diversification Opportunities for Land Homes and Super Retail
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Land and Super is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Land Homes Group and Super Retail Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Super Retail Group and Land Homes 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 Land Homes Group are associated (or correlated) with Super Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Super Retail Group has no effect on the direction of Land Homes i.e., Land Homes and Super Retail go up and down completely randomly.
Pair Corralation between Land Homes and Super Retail
Assuming the 90 days trading horizon Land Homes Group is expected to under-perform the Super Retail. But the stock apears to be less risky and, when comparing its historical volatility, Land Homes Group is 1.59 times less risky than Super Retail. The stock trades about -0.1 of its potential returns per unit of risk. The Super Retail Group is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,192 in Super Retail Group on August 29, 2024 and sell it today you would earn a total of 297.00 from holding Super Retail Group or generate 24.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Land Homes Group vs. Super Retail Group
Performance |
| Timeline |
| Land Homes Group |
| Super Retail Group |
Land Homes and Super Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Land Homes and Super Retail
The main advantage of trading using opposite Land Homes and Super Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Land Homes position performs unexpectedly, Super Retail 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 Super Retail will offset losses from the drop in Super Retail's long position.| Land Homes vs. Australian Unity Office | Land Homes vs. Champion Iron | Land Homes vs. Ridley | Land Homes vs. Peel Mining |
| Super Retail vs. Readytech Holdings | Super Retail vs. IDP Education | Super Retail vs. Richmond Vanadium Technology | Super Retail vs. Kip McGrath Education |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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