Correlation Between Super Retail and Latitude Financial
Can any of the company-specific risk be diversified away by investing in both Super Retail and Latitude Financial 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 Latitude Financial 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 Latitude Financial Services, you can compare the effects of market volatilities on Super Retail and Latitude Financial 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 Latitude Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Super Retail and Latitude Financial.
Diversification Opportunities for Super Retail and Latitude Financial
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Super and Latitude is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Super Retail Group and Latitude Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Latitude Financial 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 Latitude Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Latitude Financial has no effect on the direction of Super Retail i.e., Super Retail and Latitude Financial go up and down completely randomly.
Pair Corralation between Super Retail and Latitude Financial
Assuming the 90 days trading horizon Super Retail Group is expected to generate 4.46 times more return on investment than Latitude Financial. However, Super Retail is 4.46 times more volatile than Latitude Financial Services. It trades about 0.11 of its potential returns per unit of risk. Latitude Financial Services is currently generating about 0.0 per unit of risk. If you would invest 1,530 in Super Retail Group on November 7, 2024 and sell it today you would earn a total of 38.00 from holding Super Retail Group or generate 2.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Super Retail Group vs. Latitude Financial Services
Performance |
| Timeline |
| Super Retail Group |
| Latitude Financial |
Super Retail and Latitude Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Super Retail and Latitude Financial
The main advantage of trading using opposite Super Retail and Latitude Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Super Retail position performs unexpectedly, Latitude Financial 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 Latitude Financial will offset losses from the drop in Latitude Financial's long position.| Super Retail vs. Commonwealth Bank of | Super Retail vs. Latitude Financial Services | Super Retail vs. Duketon Mining | Super Retail vs. Australian Unity Office |
| Latitude Financial vs. Spirit Telecom | Latitude Financial vs. Retail Food Group | Latitude Financial vs. Dicker Data | Latitude Financial vs. Beam Communications Holdings |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
Other Complementary Tools
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |