Correlation Between Super Retail and Capitol Health
Can any of the company-specific risk be diversified away by investing in both Super Retail and Capitol Health 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 Super Retail and Capitol Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Super Retail Group and Capitol Health, you can compare the effects of market volatilities on Super Retail and Capitol Health 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 Super Retail with a short position of Capitol Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Super Retail and Capitol Health.
Diversification Opportunities for Super Retail and Capitol Health
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Super and Capitol is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Super Retail Group and Capitol Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capitol Health and Super Retail 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 Super Retail Group are associated (or correlated) with Capitol Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capitol Health has no effect on the direction of Super Retail i.e., Super Retail and Capitol Health go up and down completely randomly.
Pair Corralation between Super Retail and Capitol Health
Assuming the 90 days trading horizon Super Retail Group is expected to generate 0.67 times more return on investment than Capitol Health. However, Super Retail Group is 1.48 times less risky than Capitol Health. It trades about -0.12 of its potential returns per unit of risk. Capitol Health is currently generating about -0.14 per unit of risk. If you would invest 1,518 in Super Retail Group on August 26, 2024 and sell it today you would lose (68.00) from holding Super Retail Group or give up 4.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Super Retail Group vs. Capitol Health
Performance |
| Timeline |
| Super Retail Group |
| Capitol Health |
Super Retail and Capitol Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Super Retail and Capitol Health
The main advantage of trading using opposite Super Retail and Capitol Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Super Retail position performs unexpectedly, Capitol Health 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 Capitol Health will offset losses from the drop in Capitol Health's long position.| Super Retail vs. REGAL ASIAN INVESTMENTS | Super Retail vs. Qbe Insurance Group | Super Retail vs. Wt Financial Group | Super Retail vs. Kkr Credit Income |
| Capitol Health vs. Inventis | Capitol Health vs. PM Capital Global | Capitol Health vs. Macquarie Group Ltd | Capitol Health vs. Wam Leaders |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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