Correlation Between Sky Metals and Super Retail
Can any of the company-specific risk be diversified away by investing in both Sky Metals 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 Sky Metals and Super Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sky Metals and Super Retail Group, you can compare the effects of market volatilities on Sky Metals 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 Sky Metals with a short position of Super Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sky Metals and Super Retail.
Diversification Opportunities for Sky Metals and Super Retail
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sky and Super is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Sky Metals 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 Sky Metals 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 Sky Metals 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 Sky Metals i.e., Sky Metals and Super Retail go up and down completely randomly.
Pair Corralation between Sky Metals and Super Retail
Assuming the 90 days trading horizon Sky Metals is expected to generate 3.06 times more return on investment than Super Retail. However, Sky Metals is 3.06 times more volatile than Super Retail Group. It trades about 0.03 of its potential returns per unit of risk. Super Retail Group is currently generating about 0.05 per unit of risk. If you would invest 5.10 in Sky Metals on August 26, 2024 and sell it today you would earn a total of 0.00 from holding Sky Metals or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 96.8% |
| Values | Daily Returns |
Sky Metals vs. Super Retail Group
Performance |
| Timeline |
| Sky Metals |
| Super Retail Group |
Sky Metals and Super Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sky Metals and Super Retail
The main advantage of trading using opposite Sky Metals and Super Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sky Metals 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.| Sky Metals vs. REGAL ASIAN INVESTMENTS | Sky Metals vs. Aurelia Metals | Sky Metals vs. A1 Investments Resources | Sky Metals vs. Hudson Investment Group |
| Super Retail vs. Skycity Entertainment Group | Super Retail vs. ABACUS STORAGE KING | Super Retail vs. Vulcan Steel | Super Retail vs. My Foodie Box |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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