Correlation Between Super Retail and Mount Gibson
Can any of the company-specific risk be diversified away by investing in both Super Retail and Mount Gibson 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 Mount Gibson 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 Mount Gibson Iron, you can compare the effects of market volatilities on Super Retail and Mount Gibson 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 Mount Gibson. Check out your portfolio center. Please also check ongoing floating volatility patterns of Super Retail and Mount Gibson.
Diversification Opportunities for Super Retail and Mount Gibson
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Super and Mount is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Super Retail Group and Mount Gibson Iron in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mount Gibson 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 Mount Gibson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mount Gibson Iron has no effect on the direction of Super Retail i.e., Super Retail and Mount Gibson go up and down completely randomly.
Pair Corralation between Super Retail and Mount Gibson
Assuming the 90 days trading horizon Super Retail Group is expected to generate 0.64 times more return on investment than Mount Gibson. However, Super Retail Group is 1.57 times less risky than Mount Gibson. It trades about 0.0 of its potential returns per unit of risk. Mount Gibson Iron is currently generating about -0.06 per unit of risk. If you would invest 1,510 in Super Retail Group on September 3, 2024 and sell it today you would lose (37.00) from holding Super Retail Group or give up 2.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Super Retail Group vs. Mount Gibson Iron
Performance |
| Timeline |
| Super Retail Group |
| Mount Gibson Iron |
Super Retail and Mount Gibson Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Super Retail and Mount Gibson
The main advantage of trading using opposite Super Retail and Mount Gibson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Super Retail position performs unexpectedly, Mount Gibson 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 Mount Gibson will offset losses from the drop in Mount Gibson's long position.| Super Retail vs. Westpac Banking | Super Retail vs. Champion Iron | Super Retail vs. iShares Global Healthcare | Super Retail vs. Peel Mining |
| Mount Gibson vs. Northern Star Resources | Mount Gibson vs. Evolution Mining | Mount Gibson vs. Bluescope Steel | Mount Gibson vs. Aneka Tambang Tbk |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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