Correlation Between Stella Jones and Superior Plus
Can any of the company-specific risk be diversified away by investing in both Stella Jones and Superior Plus 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 Stella Jones and Superior Plus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stella Jones and Superior Plus Corp, you can compare the effects of market volatilities on Stella Jones and Superior Plus 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 Stella Jones with a short position of Superior Plus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stella Jones and Superior Plus.
Diversification Opportunities for Stella Jones and Superior Plus
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Stella and Superior is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Stella Jones and Superior Plus Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Superior Plus Corp and Stella Jones 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 Stella Jones are associated (or correlated) with Superior Plus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Superior Plus Corp has no effect on the direction of Stella Jones i.e., Stella Jones and Superior Plus go up and down completely randomly.
Pair Corralation between Stella Jones and Superior Plus
Assuming the 90 days horizon Stella Jones is expected to under-perform the Superior Plus. But the stock apears to be less risky and, when comparing its historical volatility, Stella Jones is 1.55 times less risky than Superior Plus. The stock trades about -0.26 of its potential returns per unit of risk. The Superior Plus Corp is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 681.00 in Superior Plus Corp on August 25, 2024 and sell it today you would lose (68.00) from holding Superior Plus Corp or give up 9.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stella Jones vs. Superior Plus Corp
Performance |
| Timeline |
| Stella Jones |
| Superior Plus Corp |
Stella Jones and Superior Plus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stella Jones and Superior Plus
The main advantage of trading using opposite Stella Jones and Superior Plus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stella Jones position performs unexpectedly, Superior Plus 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 Superior Plus will offset losses from the drop in Superior Plus' long position.| Stella Jones vs. Richelieu Hardware | Stella Jones vs. CCL Industries | Stella Jones vs. Stantec | Stella Jones vs. Gildan Activewear |
| Superior Plus vs. Gibson Energy | Superior Plus vs. Parkland Fuel | Superior Plus vs. Mullen Group | Superior Plus vs. Keyera Corp |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |