Correlation Between Red Hill and Super Retail
Can any of the company-specific risk be diversified away by investing in both Red Hill 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 Red Hill and Super Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Red Hill Iron and Super Retail Group, you can compare the effects of market volatilities on Red Hill 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 Red Hill with a short position of Super Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Red Hill and Super Retail.
Diversification Opportunities for Red Hill and Super Retail
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Red and Super is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Red Hill Iron 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 Red Hill 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 Red Hill Iron 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 Red Hill i.e., Red Hill and Super Retail go up and down completely randomly.
Pair Corralation between Red Hill and Super Retail
Assuming the 90 days trading horizon Red Hill Iron is expected to under-perform the Super Retail. In addition to that, Red Hill is 1.07 times more volatile than Super Retail Group. It trades about -0.03 of its total potential returns per unit of risk. Super Retail Group is currently generating about 0.18 per unit of volatility. If you would invest 1,518 in Super Retail Group on November 1, 2024 and sell it today you would earn a total of 65.00 from holding Super Retail Group or generate 4.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Red Hill Iron vs. Super Retail Group
Performance |
| Timeline |
| Red Hill Iron |
| Super Retail Group |
Red Hill and Super Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Red Hill and Super Retail
The main advantage of trading using opposite Red Hill and Super Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Red Hill 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.| Red Hill vs. Black Rock Mining | Red Hill vs. Aeon Metals | Red Hill vs. Pure Foods Tasmania | Red Hill vs. Autosports Group |
| Super Retail vs. Djerriwarrh Investments | Super Retail vs. Technology One | Super Retail vs. Pinnacle Investment Management | Super Retail vs. Advanced Braking Technology |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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