Correlation Between Super Retail and Hawsons Iron
Can any of the company-specific risk be diversified away by investing in both Super Retail and Hawsons Iron 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 Hawsons Iron 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 Hawsons Iron, you can compare the effects of market volatilities on Super Retail and Hawsons Iron 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 Hawsons Iron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Super Retail and Hawsons Iron.
Diversification Opportunities for Super Retail and Hawsons Iron
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Super and Hawsons is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Super Retail Group and Hawsons Iron in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hawsons Iron 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 Hawsons Iron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hawsons Iron has no effect on the direction of Super Retail i.e., Super Retail and Hawsons Iron go up and down completely randomly.
Pair Corralation between Super Retail and Hawsons Iron
Assuming the 90 days trading horizon Super Retail Group is expected to under-perform the Hawsons Iron. But the stock apears to be less risky and, when comparing its historical volatility, Super Retail Group is 2.7 times less risky than Hawsons Iron. The stock trades about -0.13 of its potential returns per unit of risk. The Hawsons Iron is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 2.40 in Hawsons Iron on August 29, 2024 and sell it today you would lose (0.40) from holding Hawsons Iron or give up 16.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Super Retail Group vs. Hawsons Iron
Performance |
| Timeline |
| Super Retail Group |
| Hawsons Iron |
Super Retail and Hawsons Iron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Super Retail and Hawsons Iron
The main advantage of trading using opposite Super Retail and Hawsons Iron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Super Retail position performs unexpectedly, Hawsons Iron 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 Hawsons Iron will offset losses from the drop in Hawsons Iron's long position.| Super Retail vs. Readytech Holdings | Super Retail vs. IDP Education | Super Retail vs. Richmond Vanadium Technology | Super Retail vs. Kip McGrath Education |
| Hawsons Iron vs. Richmond Vanadium Technology | Hawsons Iron vs. Computershare | Hawsons Iron vs. Westpac Banking | Hawsons Iron vs. Macquarie Bank Limited |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |