Correlation Between SUPER GROUP and DEVRY EDUCATION
Can any of the company-specific risk be diversified away by investing in both SUPER GROUP and DEVRY EDUCATION 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 SUPER GROUP and DEVRY EDUCATION into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SUPER GROUP LTD and DEVRY EDUCATION GRP, you can compare the effects of market volatilities on SUPER GROUP and DEVRY EDUCATION 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 SUPER GROUP with a short position of DEVRY EDUCATION. Check out your portfolio center. Please also check ongoing floating volatility patterns of SUPER GROUP and DEVRY EDUCATION.
Diversification Opportunities for SUPER GROUP and DEVRY EDUCATION
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SUPER and DEVRY is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding SUPER GROUP LTD and DEVRY EDUCATION GRP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DEVRY EDUCATION GRP and SUPER GROUP 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 SUPER GROUP LTD are associated (or correlated) with DEVRY EDUCATION. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DEVRY EDUCATION GRP has no effect on the direction of SUPER GROUP i.e., SUPER GROUP and DEVRY EDUCATION go up and down completely randomly.
Pair Corralation between SUPER GROUP and DEVRY EDUCATION
Assuming the 90 days trading horizon SUPER GROUP LTD is expected to generate 2.75 times more return on investment than DEVRY EDUCATION. However, SUPER GROUP is 2.75 times more volatile than DEVRY EDUCATION GRP. It trades about 0.25 of its potential returns per unit of risk. DEVRY EDUCATION GRP is currently generating about -0.03 per unit of risk. If you would invest 118.00 in SUPER GROUP LTD on September 12, 2024 and sell it today you would earn a total of 37.00 from holding SUPER GROUP LTD or generate 31.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SUPER GROUP LTD vs. DEVRY EDUCATION GRP
Performance |
| Timeline |
| SUPER GROUP LTD |
| DEVRY EDUCATION GRP |
SUPER GROUP and DEVRY EDUCATION Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SUPER GROUP and DEVRY EDUCATION
The main advantage of trading using opposite SUPER GROUP and DEVRY EDUCATION positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SUPER GROUP position performs unexpectedly, DEVRY EDUCATION 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 DEVRY EDUCATION will offset losses from the drop in DEVRY EDUCATION's long position.| SUPER GROUP vs. Aegean Airlines SA | SUPER GROUP vs. Nok Airlines PCL | SUPER GROUP vs. United Airlines Holdings | SUPER GROUP vs. American Airlines Group |
| DEVRY EDUCATION vs. FUYO GENERAL LEASE | DEVRY EDUCATION vs. WIZZ AIR HLDGUNSPADR4 | DEVRY EDUCATION vs. MYFAIR GOLD P | DEVRY EDUCATION vs. GRIFFIN MINING LTD |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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