Correlation Between Super Retail and MA Financial
Can any of the company-specific risk be diversified away by investing in both Super Retail and MA 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 MA 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 MA Financial Group, you can compare the effects of market volatilities on Super Retail and MA 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 MA Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Super Retail and MA Financial.
Diversification Opportunities for Super Retail and MA Financial
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Super and MAF is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Super Retail Group and MA Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MA Financial Group 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 MA Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MA Financial Group has no effect on the direction of Super Retail i.e., Super Retail and MA Financial go up and down completely randomly.
Pair Corralation between Super Retail and MA Financial
Assuming the 90 days trading horizon Super Retail is expected to generate 5.18 times less return on investment than MA Financial. But when comparing it to its historical volatility, Super Retail Group is 1.68 times less risky than MA Financial. It trades about 0.1 of its potential returns per unit of risk. MA Financial Group is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 583.00 in MA Financial Group on November 3, 2024 and sell it today you would earn a total of 81.00 from holding MA Financial Group or generate 13.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Super Retail Group vs. MA Financial Group
Performance |
| Timeline |
| Super Retail Group |
| MA Financial Group |
Super Retail and MA Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Super Retail and MA Financial
The main advantage of trading using opposite Super Retail and MA Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Super Retail position performs unexpectedly, MA 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 MA Financial will offset losses from the drop in MA Financial's long position.| Super Retail vs. Dicker Data | Super Retail vs. Beam Communications Holdings | Super Retail vs. Chalice Mining Limited | Super Retail vs. Globe Metals Mining |
| MA Financial vs. Collins Foods | MA Financial vs. Sports Entertainment Group | MA Financial vs. Dexus Convenience Retail | MA Financial vs. Pure Foods Tasmania |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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