Correlation Between Super Retail and Flagship Investments
Can any of the company-specific risk be diversified away by investing in both Super Retail and Flagship Investments 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 Flagship Investments 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 Flagship Investments, you can compare the effects of market volatilities on Super Retail and Flagship Investments 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 Flagship Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Super Retail and Flagship Investments.
Diversification Opportunities for Super Retail and Flagship Investments
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Super and Flagship is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Super Retail Group and Flagship Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flagship Investments 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 Flagship Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flagship Investments has no effect on the direction of Super Retail i.e., Super Retail and Flagship Investments go up and down completely randomly.
Pair Corralation between Super Retail and Flagship Investments
Assuming the 90 days trading horizon Super Retail is expected to generate 3.13 times less return on investment than Flagship Investments. In addition to that, Super Retail is 1.23 times more volatile than Flagship Investments. It trades about 0.02 of its total potential returns per unit of risk. Flagship Investments is currently generating about 0.09 per unit of volatility. If you would invest 156.00 in Flagship Investments on August 29, 2024 and sell it today you would earn a total of 54.00 from holding Flagship Investments or generate 34.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Super Retail Group vs. Flagship Investments
Performance |
| Timeline |
| Super Retail Group |
| Flagship Investments |
Super Retail and Flagship Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Super Retail and Flagship Investments
The main advantage of trading using opposite Super Retail and Flagship Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Super Retail position performs unexpectedly, Flagship Investments 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 Flagship Investments will offset losses from the drop in Flagship Investments' long position.| Super Retail vs. Readytech Holdings | Super Retail vs. IDP Education | Super Retail vs. Richmond Vanadium Technology | Super Retail vs. Kip McGrath Education |
| Flagship Investments vs. ACDC Metals | Flagship Investments vs. Health and Plant | Flagship Investments vs. Aeon Metals | Flagship Investments vs. Sky Metals |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Transaction History View history of all your transactions and understand their impact on performance | |
| Stocks Directory Find actively traded stocks across global markets | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |