Correlation Between Super Retail and Coles
Can any of the company-specific risk be diversified away by investing in both Super Retail and Coles 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 Coles 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 Coles Group, you can compare the effects of market volatilities on Super Retail and Coles 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 Coles. Check out your portfolio center. Please also check ongoing floating volatility patterns of Super Retail and Coles.
Diversification Opportunities for Super Retail and Coles
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Super and Coles is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Super Retail Group and Coles Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coles Group 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 Coles. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coles Group has no effect on the direction of Super Retail i.e., Super Retail and Coles go up and down completely randomly.
Pair Corralation between Super Retail and Coles
Assuming the 90 days trading horizon Super Retail is expected to generate 1.77 times less return on investment than Coles. In addition to that, Super Retail is 1.78 times more volatile than Coles Group. It trades about 0.11 of its total potential returns per unit of risk. Coles Group is currently generating about 0.36 per unit of volatility. If you would invest 1,752 in Coles Group on September 3, 2024 and sell it today you would earn a total of 107.00 from holding Coles Group or generate 6.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Super Retail Group vs. Coles Group
Performance |
| Timeline |
| Super Retail Group |
| Coles Group |
Super Retail and Coles Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Super Retail and Coles
The main advantage of trading using opposite Super Retail and Coles positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Super Retail position performs unexpectedly, Coles 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 Coles will offset losses from the drop in Coles' long position.| Super Retail vs. Westpac Banking | Super Retail vs. Champion Iron | Super Retail vs. iShares Global Healthcare | Super Retail vs. Peel Mining |
| Coles vs. Aurelia Metals | Coles vs. Regal Investment | Coles vs. REGAL ASIAN INVESTMENTS | Coles vs. MFF Capital Investments |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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