Correlation Between Super Retail and JB Hi
Can any of the company-specific risk be diversified away by investing in both Super Retail and JB Hi 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 JB Hi 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 JB Hi Fi, you can compare the effects of market volatilities on Super Retail and JB Hi 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 JB Hi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Super Retail and JB Hi.
Diversification Opportunities for Super Retail and JB Hi
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Super and JBH is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Super Retail Group and JB Hi Fi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JB Hi Fi 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 JB Hi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JB Hi Fi has no effect on the direction of Super Retail i.e., Super Retail and JB Hi go up and down completely randomly.
Pair Corralation between Super Retail and JB Hi
Assuming the 90 days trading horizon Super Retail is expected to generate 17.47 times less return on investment than JB Hi. But when comparing it to its historical volatility, Super Retail Group is 1.15 times less risky than JB Hi. It trades about 0.01 of its potential returns per unit of risk. JB Hi Fi is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 9,523 in JB Hi Fi on November 6, 2024 and sell it today you would earn a total of 602.00 from holding JB Hi Fi or generate 6.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Super Retail Group vs. JB Hi Fi
Performance |
| Timeline |
| Super Retail Group |
| JB Hi Fi |
Super Retail and JB Hi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Super Retail and JB Hi
The main advantage of trading using opposite Super Retail and JB Hi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Super Retail position performs unexpectedly, JB Hi 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 JB Hi will offset losses from the drop in JB Hi's long position.| Super Retail vs. Aneka Tambang Tbk | Super Retail vs. Commonwealth Bank | Super Retail vs. Commonwealth Bank of | Super Retail vs. Australia and New |
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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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