Correlation Between Super Retail and Globe Metals
Can any of the company-specific risk be diversified away by investing in both Super Retail and Globe Metals 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 Globe Metals 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 Globe Metals Mining, you can compare the effects of market volatilities on Super Retail and Globe Metals 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 Globe Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Super Retail and Globe Metals.
Diversification Opportunities for Super Retail and Globe Metals
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Super and Globe is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Super Retail Group and Globe Metals Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globe Metals Mining 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 Globe Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Globe Metals Mining has no effect on the direction of Super Retail i.e., Super Retail and Globe Metals go up and down completely randomly.
Pair Corralation between Super Retail and Globe Metals
Assuming the 90 days trading horizon Super Retail Group is expected to generate 0.31 times more return on investment than Globe Metals. However, Super Retail Group is 3.25 times less risky than Globe Metals. It trades about 0.08 of its potential returns per unit of risk. Globe Metals Mining is currently generating about -0.03 per unit of risk. If you would invest 1,496 in Super Retail Group on October 10, 2024 and sell it today you would earn a total of 32.00 from holding Super Retail Group or generate 2.14% 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. Globe Metals Mining
Performance |
| Timeline |
| Super Retail Group |
| Globe Metals Mining |
Super Retail and Globe Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Super Retail and Globe Metals
The main advantage of trading using opposite Super Retail and Globe Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Super Retail position performs unexpectedly, Globe Metals 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 Globe Metals will offset losses from the drop in Globe Metals' long position.| Super Retail vs. National Storage REIT | Super Retail vs. Hutchison Telecommunications | Super Retail vs. BSP Financial Group | Super Retail vs. Spirit Telecom |
| Globe Metals vs. ARN Media Limited | Globe Metals vs. Southern Cross Media | Globe Metals vs. Mach7 Technologies | Globe Metals vs. Dug Technology |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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