Correlation Between Super Retail and Diversified United
Can any of the company-specific risk be diversified away by investing in both Super Retail and Diversified United 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 Diversified United 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 Diversified United Investment, you can compare the effects of market volatilities on Super Retail and Diversified United 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 Diversified United. Check out your portfolio center. Please also check ongoing floating volatility patterns of Super Retail and Diversified United.
Diversification Opportunities for Super Retail and Diversified United
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Super and Diversified is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Super Retail Group and Diversified United Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Diversified United 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 Diversified United. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Diversified United has no effect on the direction of Super Retail i.e., Super Retail and Diversified United go up and down completely randomly.
Pair Corralation between Super Retail and Diversified United
Assuming the 90 days trading horizon Super Retail is expected to generate 1.56 times less return on investment than Diversified United. In addition to that, Super Retail is 2.74 times more volatile than Diversified United Investment. It trades about 0.02 of its total potential returns per unit of risk. Diversified United Investment is currently generating about 0.08 per unit of volatility. If you would invest 468.00 in Diversified United Investment on September 2, 2024 and sell it today you would earn a total of 64.00 from holding Diversified United Investment or generate 13.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Super Retail Group vs. Diversified United Investment
Performance |
| Timeline |
| Super Retail Group |
| Diversified United |
Super Retail and Diversified United Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Super Retail and Diversified United
The main advantage of trading using opposite Super Retail and Diversified United positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Super Retail position performs unexpectedly, Diversified United 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 Diversified United will offset losses from the drop in Diversified United's long position.| Super Retail vs. Hotel Property Investments | Super Retail vs. National Australia Bank | Super Retail vs. Pioneer Credit | Super Retail vs. Magellan Financial Group |
| Diversified United vs. Singular Health Group | Diversified United vs. Austco Healthcare | Diversified United vs. Flagship Investments | Diversified United vs. Platinum Asset Management |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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