Correlation Between Stoneridge and Superior Industries
Can any of the company-specific risk be diversified away by investing in both Stoneridge and Superior Industries 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 Stoneridge and Superior Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stoneridge and Superior Industries International, you can compare the effects of market volatilities on Stoneridge and Superior Industries 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 Stoneridge with a short position of Superior Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stoneridge and Superior Industries.
Diversification Opportunities for Stoneridge and Superior Industries
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Stoneridge and Superior is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Stoneridge and Superior Industries Internatio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Superior Industries and Stoneridge 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 Stoneridge are associated (or correlated) with Superior Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Superior Industries has no effect on the direction of Stoneridge i.e., Stoneridge and Superior Industries go up and down completely randomly.
Pair Corralation between Stoneridge and Superior Industries
Considering the 90-day investment horizon Stoneridge is expected to under-perform the Superior Industries. In addition to that, Stoneridge is 2.17 times more volatile than Superior Industries International. It trades about -0.2 of its total potential returns per unit of risk. Superior Industries International is currently generating about -0.22 per unit of volatility. If you would invest 287.00 in Superior Industries International on August 24, 2024 and sell it today you would lose (41.00) from holding Superior Industries International or give up 14.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stoneridge vs. Superior Industries Internatio
Performance |
| Timeline |
| Stoneridge |
| Superior Industries |
Stoneridge and Superior Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stoneridge and Superior Industries
The main advantage of trading using opposite Stoneridge and Superior Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stoneridge position performs unexpectedly, Superior Industries 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 Industries will offset losses from the drop in Superior Industries' long position.| Stoneridge vs. Fox Factory Holding | Stoneridge vs. Lear Corporation | Stoneridge vs. Commercial Vehicle Group | Stoneridge vs. BorgWarner |
| Superior Industries vs. Fox Factory Holding | Superior Industries vs. Lear Corporation | Superior Industries vs. Commercial Vehicle Group | Superior Industries vs. Stoneridge |
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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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