Correlation Between Skycity Entertainment and Super Retail
Can any of the company-specific risk be diversified away by investing in both Skycity 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 Skycity 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 Skycity Entertainment Group and Super Retail Group, you can compare the effects of market volatilities on Skycity 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 Skycity Entertainment with a short position of Super Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Skycity Entertainment and Super Retail.
Diversification Opportunities for Skycity Entertainment and Super Retail
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Skycity and Super is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Skycity 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 Skycity 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 Skycity 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 Skycity Entertainment i.e., Skycity Entertainment and Super Retail go up and down completely randomly.
Pair Corralation between Skycity Entertainment and Super Retail
Assuming the 90 days trading horizon Skycity Entertainment Group is expected to generate 1.5 times more return on investment than Super Retail. However, Skycity Entertainment is 1.5 times more volatile than Super Retail Group. It trades about 0.11 of its potential returns per unit of risk. Super Retail Group is currently generating about 0.02 per unit of risk. If you would invest 127.00 in Skycity Entertainment Group on August 30, 2024 and sell it today you would earn a total of 7.00 from holding Skycity Entertainment Group or generate 5.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Skycity Entertainment Group vs. Super Retail Group
Performance |
| Timeline |
| Skycity Entertainment |
| Super Retail Group |
Skycity Entertainment and Super Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Skycity Entertainment and Super Retail
The main advantage of trading using opposite Skycity Entertainment and Super Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Skycity 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.| Skycity Entertainment vs. Summit Resources Limited | Skycity Entertainment vs. Champion Iron | Skycity Entertainment vs. Ridley | Skycity Entertainment vs. Peel Mining |
| Super Retail vs. Readytech Holdings | Super Retail vs. IDP Education | Super Retail vs. Richmond Vanadium Technology | Super Retail vs. Kip McGrath Education |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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