Correlation Between Sports Entertainment and Super Retail
Can any of the company-specific risk be diversified away by investing in both Sports Entertainment 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 Sports Entertainment and Super Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sports Entertainment Group and Super Retail Group, you can compare the effects of market volatilities on Sports Entertainment 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 Sports Entertainment with a short position of Super Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sports Entertainment and Super Retail.
Diversification Opportunities for Sports Entertainment and Super Retail
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sports and Super is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Sports Entertainment Group 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 Sports Entertainment 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 Sports Entertainment Group 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 Sports Entertainment i.e., Sports Entertainment and Super Retail go up and down completely randomly.
Pair Corralation between Sports Entertainment and Super Retail
Assuming the 90 days trading horizon Sports Entertainment Group is expected to under-perform the Super Retail. In addition to that, Sports Entertainment is 5.78 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 -0.07 per unit of volatility. If you would invest 1,568 in Super Retail Group on October 25, 2024 and sell it today you would lose (18.00) from holding Super Retail Group or give up 1.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sports Entertainment Group vs. Super Retail Group
Performance |
| Timeline |
| Sports Entertainment |
| Super Retail Group |
Sports Entertainment and Super Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sports Entertainment and Super Retail
The main advantage of trading using opposite Sports Entertainment and Super Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sports Entertainment 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.| Sports Entertainment vs. Autosports Group | Sports Entertainment vs. Magellan Financial Group | Sports Entertainment vs. Finexia Financial Group | Sports Entertainment vs. Seven West Media |
| Super Retail vs. Charter Hall Retail | Super Retail vs. Bank of Queensland | Super Retail vs. Westpac Banking | Super Retail vs. Great Southern 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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