Correlation Between Parkland Fuel and Superior Plus

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Can any of the company-specific risk be diversified away by investing in both Parkland Fuel 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 Parkland Fuel and Superior Plus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Parkland Fuel and Superior Plus Corp, you can compare the effects of market volatilities on Parkland Fuel 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 Parkland Fuel with a short position of Superior Plus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Parkland Fuel and Superior Plus.

Diversification Opportunities for Parkland Fuel and Superior Plus

ParklandSuperiorDiversified AwayParklandSuperiorDiversified Away100%
0.12
  Correlation Coefficient

Average diversification

The 3 months correlation between Parkland and Superior is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Parkland Fuel 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 Parkland Fuel 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 Parkland Fuel 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 Parkland Fuel i.e., Parkland Fuel and Superior Plus go up and down completely randomly.

Pair Corralation between Parkland Fuel and Superior Plus

Assuming the 90 days trading horizon Parkland Fuel is expected to generate 3.1 times more return on investment than Superior Plus. However, Parkland Fuel is 3.1 times more volatile than Superior Plus Corp. It trades about 0.13 of its potential returns per unit of risk. Superior Plus Corp is currently generating about -0.24 per unit of risk. If you would invest  3,432  in Parkland Fuel on November 24, 2024 and sell it today you would earn a total of  300.00  from holding Parkland Fuel or generate 8.74% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Parkland Fuel  vs.  Superior Plus Corp

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -5051015
JavaScript chart by amCharts 3.21.15PKI SPB
       Timeline  
Parkland Fuel 

Risk-Adjusted Performance

Modest

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Parkland Fuel are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating forward indicators, Parkland Fuel may actually be approaching a critical reversion point that can send shares even higher in March 2025.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb303234363840
Superior Plus Corp 

Risk-Adjusted Performance

Insignificant

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Superior Plus Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental drivers, Superior Plus is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb5.65.866.26.46.66.87

Parkland Fuel and Superior Plus Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-6.98-5.23-3.48-1.720.02921.763.575.397.29.02 0.020.040.060.08
JavaScript chart by amCharts 3.21.15PKI SPB
       Returns  

Pair Trading with Parkland Fuel and Superior Plus

The main advantage of trading using opposite Parkland Fuel and Superior Plus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Parkland Fuel 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.
The idea behind Parkland Fuel and Superior Plus Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.

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