Correlation Between Superior Plus and Parkland Fuel
Can any of the company-specific risk be diversified away by investing in both Superior Plus and Parkland Fuel 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 Parkland Fuel 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 Parkland Fuel, you can compare the effects of market volatilities on Superior Plus and Parkland Fuel 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 Parkland Fuel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Superior Plus and Parkland Fuel.
Diversification Opportunities for Superior Plus and Parkland Fuel
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Superior and Parkland is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Superior Plus Corp and Parkland Fuel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Parkland Fuel 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 Parkland Fuel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Parkland Fuel has no effect on the direction of Superior Plus i.e., Superior Plus and Parkland Fuel go up and down completely randomly.
Pair Corralation between Superior Plus and Parkland Fuel
Assuming the 90 days trading horizon Superior Plus Corp is expected to under-perform the Parkland Fuel. In addition to that, Superior Plus is 2.51 times more volatile than Parkland Fuel. It trades about -0.02 of its total potential returns per unit of risk. Parkland Fuel is currently generating about 0.01 per unit of volatility. If you would invest 3,439 in Parkland Fuel on August 28, 2024 and sell it today you would earn a total of 2.00 from holding Parkland Fuel or generate 0.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Superior Plus Corp vs. Parkland Fuel
Performance |
| Timeline |
| Superior Plus Corp |
| Parkland Fuel |
Superior Plus and Parkland Fuel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Superior Plus and Parkland Fuel
The main advantage of trading using opposite Superior Plus and Parkland Fuel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Superior Plus position performs unexpectedly, Parkland Fuel 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 Parkland Fuel will offset losses from the drop in Parkland Fuel's long position.| Superior Plus vs. Gibson Energy | Superior Plus vs. Parkland Fuel | Superior Plus vs. Mullen Group | Superior Plus vs. Keyera Corp |
| Parkland Fuel vs. Keyera Corp | Parkland Fuel vs. Gibson Energy | Parkland Fuel vs. TFI International | Parkland Fuel vs. Pembina Pipeline 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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