Correlation Between National Australia and Super Retail
Can any of the company-specific risk be diversified away by investing in both National Australia 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 National Australia and Super Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National Australia Bank and Super Retail Group, you can compare the effects of market volatilities on National Australia 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 National Australia with a short position of Super Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Australia and Super Retail.
Diversification Opportunities for National Australia and Super Retail
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between National and Super is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding National Australia Bank 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 National Australia 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 National Australia Bank 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 National Australia i.e., National Australia and Super Retail go up and down completely randomly.
Pair Corralation between National Australia and Super Retail
Assuming the 90 days trading horizon National Australia Bank is expected to generate 0.15 times more return on investment than Super Retail. However, National Australia Bank is 6.55 times less risky than Super Retail. It trades about 0.01 of its potential returns per unit of risk. Super Retail Group is currently generating about -0.06 per unit of risk. If you would invest 10,490 in National Australia Bank on October 29, 2024 and sell it today you would earn a total of 3.00 from holding National Australia Bank or generate 0.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Australia Bank vs. Super Retail Group
Performance |
| Timeline |
| National Australia Bank |
| Super Retail Group |
National Australia and Super Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Australia and Super Retail
The main advantage of trading using opposite National Australia and Super Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Australia 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.| National Australia vs. Beston Global Food | National Australia vs. Pure Foods Tasmania | National Australia vs. My Foodie Box | National Australia vs. Fisher Paykel Healthcare |
| Super Retail vs. Healthco Healthcare and | Super Retail vs. EVE Health Group | Super Retail vs. Regis Healthcare | Super Retail vs. Austco Healthcare |
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 CEOs Directory module to screen CEOs from public companies around the world.
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