Correlation Between Super Retail and Indiana Resources
Can any of the company-specific risk be diversified away by investing in both Super Retail and Indiana Resources 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 Indiana Resources 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 Indiana Resources, you can compare the effects of market volatilities on Super Retail and Indiana Resources 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 Indiana Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Super Retail and Indiana Resources.
Diversification Opportunities for Super Retail and Indiana Resources
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Super and Indiana is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Super Retail Group and Indiana Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indiana Resources 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 Indiana Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indiana Resources has no effect on the direction of Super Retail i.e., Super Retail and Indiana Resources go up and down completely randomly.
Pair Corralation between Super Retail and Indiana Resources
Assuming the 90 days trading horizon Super Retail Group is expected to under-perform the Indiana Resources. But the stock apears to be less risky and, when comparing its historical volatility, Super Retail Group is 1.45 times less risky than Indiana Resources. The stock trades about -0.08 of its potential returns per unit of risk. The Indiana Resources is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 6.10 in Indiana Resources on October 22, 2024 and sell it today you would earn a total of 0.30 from holding Indiana Resources or generate 4.92% 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. Indiana Resources
Performance |
| Timeline |
| Super Retail Group |
| Indiana Resources |
Super Retail and Indiana Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Super Retail and Indiana Resources
The main advantage of trading using opposite Super Retail and Indiana Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Super Retail position performs unexpectedly, Indiana Resources 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 Indiana Resources will offset losses from the drop in Indiana Resources' long position.| Super Retail vs. Bailador Technology Invest | Super Retail vs. Farm Pride Foods | Super Retail vs. WiseTech Global Limited | Super Retail vs. Pinnacle Investment Management |
| Indiana Resources vs. Firstwave Cloud Technology | Indiana Resources vs. Ainsworth Game Technology | Indiana Resources vs. Computershare | Indiana Resources 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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