Correlation Between Super Retail and NEWMONT PORATION
Can any of the company-specific risk be diversified away by investing in both Super Retail and NEWMONT PORATION 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 NEWMONT PORATION 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 NEWMONT PORATION CDI, you can compare the effects of market volatilities on Super Retail and NEWMONT PORATION 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 NEWMONT PORATION. Check out your portfolio center. Please also check ongoing floating volatility patterns of Super Retail and NEWMONT PORATION.
Diversification Opportunities for Super Retail and NEWMONT PORATION
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Super and NEWMONT is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Super Retail Group and NEWMONT PORATION CDI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEWMONT PORATION CDI 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 NEWMONT PORATION. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEWMONT PORATION CDI has no effect on the direction of Super Retail i.e., Super Retail and NEWMONT PORATION go up and down completely randomly.
Pair Corralation between Super Retail and NEWMONT PORATION
Assuming the 90 days trading horizon Super Retail Group is expected to generate 0.86 times more return on investment than NEWMONT PORATION. However, Super Retail Group is 1.16 times less risky than NEWMONT PORATION. It trades about -0.06 of its potential returns per unit of risk. NEWMONT PORATION CDI is currently generating about -0.27 per unit of risk. If you would invest 1,514 in Super Retail Group on August 29, 2024 and sell it today you would lose (39.00) from holding Super Retail Group or give up 2.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Super Retail Group vs. NEWMONT PORATION CDI
Performance |
| Timeline |
| Super Retail Group |
| NEWMONT PORATION CDI |
Super Retail and NEWMONT PORATION Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Super Retail and NEWMONT PORATION
The main advantage of trading using opposite Super Retail and NEWMONT PORATION positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Super Retail position performs unexpectedly, NEWMONT PORATION 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 NEWMONT PORATION will offset losses from the drop in NEWMONT PORATION's long position.| Super Retail vs. Macquarie Group | Super Retail vs. Macquarie Group Ltd | Super Retail vs. Commonwealth Bank | Super Retail vs. Rio Tinto |
| NEWMONT PORATION vs. Iron Road | NEWMONT PORATION vs. Saferoads Holdings | NEWMONT PORATION vs. Perseus Mining | NEWMONT PORATION vs. Alto Metals |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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