Correlation Between Superior Plus and Exchange Income
Can any of the company-specific risk be diversified away by investing in both Superior Plus and Exchange Income 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 Plus and Exchange Income into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Superior Plus Corp and Exchange Income, you can compare the effects of market volatilities on Superior Plus and Exchange Income 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 Plus with a short position of Exchange Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Superior Plus and Exchange Income.
Diversification Opportunities for Superior Plus and Exchange Income
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Superior and Exchange is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Superior Plus Corp and Exchange Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exchange Income and Superior Plus 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 Plus Corp are associated (or correlated) with Exchange Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exchange Income has no effect on the direction of Superior Plus i.e., Superior Plus and Exchange Income go up and down completely randomly.
Pair Corralation between Superior Plus and Exchange Income
Assuming the 90 days trading horizon Superior Plus Corp is expected to under-perform the Exchange Income. In addition to that, Superior Plus is 1.5 times more volatile than Exchange Income. It trades about 0.0 of its total potential returns per unit of risk. Exchange Income is currently generating about 0.03 per unit of volatility. If you would invest 4,589 in Exchange Income on November 19, 2024 and sell it today you would earn a total of 632.00 from holding Exchange Income or generate 13.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Superior Plus Corp vs. Exchange Income
Performance |
| Timeline |
| Superior Plus Corp |
| Exchange Income |
Superior Plus and Exchange Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Superior Plus and Exchange Income
The main advantage of trading using opposite Superior Plus and Exchange Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Superior Plus position performs unexpectedly, Exchange Income 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 Exchange Income will offset losses from the drop in Exchange Income's long position.| Superior Plus vs. Gibson Energy | Superior Plus vs. Parkland Fuel | Superior Plus vs. Mullen Group | Superior Plus vs. Keyera Corp |
| Exchange Income vs. Capital Power | Exchange Income vs. Keyera Corp | Exchange Income vs. Parkland Fuel | Exchange Income vs. TFI International |
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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |