Correlation Between Resource Base and Super Retail
Can any of the company-specific risk be diversified away by investing in both Resource Base 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 Resource Base and Super Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Resource Base and Super Retail Group, you can compare the effects of market volatilities on Resource Base 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 Resource Base with a short position of Super Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Resource Base and Super Retail.
Diversification Opportunities for Resource Base and Super Retail
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Resource and Super is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Resource Base 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 Resource Base 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 Resource Base 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 Resource Base i.e., Resource Base and Super Retail go up and down completely randomly.
Pair Corralation between Resource Base and Super Retail
Assuming the 90 days trading horizon Resource Base is expected to generate 1.38 times less return on investment than Super Retail. In addition to that, Resource Base is 2.02 times more volatile than Super Retail Group. It trades about 0.02 of its total potential returns per unit of risk. Super Retail Group is currently generating about 0.06 per unit of volatility. If you would invest 1,296 in Super Retail Group on September 3, 2024 and sell it today you would earn a total of 177.00 from holding Super Retail Group or generate 13.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Resource Base vs. Super Retail Group
Performance |
| Timeline |
| Resource Base |
| Super Retail Group |
Resource Base and Super Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Resource Base and Super Retail
The main advantage of trading using opposite Resource Base and Super Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Resource Base 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.| Resource Base vs. Northern Star Resources | Resource Base vs. Evolution Mining | Resource Base vs. Bluescope Steel | Resource Base vs. Aneka Tambang Tbk |
| Super Retail vs. Westpac Banking | Super Retail vs. Champion Iron | Super Retail vs. iShares Global Healthcare | Super Retail vs. Peel Mining |
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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