Correlation Between Superior Uniform and Eastern
Can any of the company-specific risk be diversified away by investing in both Superior Uniform and Eastern 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 Superior Uniform and Eastern into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Superior Uniform Group and Eastern Co, you can compare the effects of market volatilities on Superior Uniform and Eastern 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 Superior Uniform with a short position of Eastern. Check out your portfolio center. Please also check ongoing floating volatility patterns of Superior Uniform and Eastern.
Diversification Opportunities for Superior Uniform and Eastern
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Superior and Eastern is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Superior Uniform Group and Eastern Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastern and Superior Uniform 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 Superior Uniform Group are associated (or correlated) with Eastern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastern has no effect on the direction of Superior Uniform i.e., Superior Uniform and Eastern go up and down completely randomly.
Pair Corralation between Superior Uniform and Eastern
Considering the 90-day investment horizon Superior Uniform Group is expected to generate 1.02 times more return on investment than Eastern. However, Superior Uniform is 1.02 times more volatile than Eastern Co. It trades about 0.21 of its potential returns per unit of risk. Eastern Co is currently generating about -0.13 per unit of risk. If you would invest 1,478 in Superior Uniform Group on August 26, 2024 and sell it today you would earn a total of 186.00 from holding Superior Uniform Group or generate 12.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Superior Uniform Group vs. Eastern Co
Performance |
| Timeline |
| Superior Uniform |
| Eastern |
Superior Uniform and Eastern Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Superior Uniform and Eastern
The main advantage of trading using opposite Superior Uniform and Eastern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Superior Uniform position performs unexpectedly, Eastern 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 Eastern will offset losses from the drop in Eastern's long position.| Superior Uniform vs. Lakeland Industries | Superior Uniform vs. Jerash Holdings | Superior Uniform vs. G III Apparel Group | Superior Uniform vs. JX Luxventure Limited |
| Eastern vs. Timken Company | Eastern vs. Lincoln Electric Holdings | Eastern vs. Hillman Solutions Corp | Eastern vs. AB SKF |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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