Correlation Between Option Care and Superior Plus
Can any of the company-specific risk be diversified away by investing in both Option Care 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 Option Care and Superior Plus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Option Care Health and Superior Plus Corp, you can compare the effects of market volatilities on Option Care 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 Option Care with a short position of Superior Plus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Option Care and Superior Plus.
Diversification Opportunities for Option Care and Superior Plus
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Option and Superior is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Option Care Health 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 Option Care 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 Option Care Health 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 Option Care i.e., Option Care and Superior Plus go up and down completely randomly.
Pair Corralation between Option Care and Superior Plus
Assuming the 90 days trading horizon Option Care Health is expected to under-perform the Superior Plus. In addition to that, Option Care is 1.03 times more volatile than Superior Plus Corp. It trades about -0.1 of its total potential returns per unit of risk. Superior Plus Corp is currently generating about -0.08 per unit of volatility. If you would invest 488.00 in Superior Plus Corp on August 30, 2024 and sell it today you would lose (72.00) from holding Superior Plus Corp or give up 14.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 97.73% |
| Values | Daily Returns |
Option Care Health vs. Superior Plus Corp
Performance |
| Timeline |
| Option Care Health |
| Superior Plus Corp |
Option Care and Superior Plus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Option Care and Superior Plus
The main advantage of trading using opposite Option Care and Superior Plus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Option Care 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.| Option Care vs. CarsalesCom | Option Care vs. PACIFIC ONLINE | Option Care vs. Silicon Motion Technology | Option Care vs. NISSAN CHEMICAL IND |
| Superior Plus vs. HYDROFARM HLD GRP | Superior Plus vs. Titan Machinery | Superior Plus vs. GOODYEAR T RUBBER | Superior Plus vs. Sterling Construction |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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