Correlation Between Super Retail and Pinnacle Investment
Can any of the company-specific risk be diversified away by investing in both Super Retail and Pinnacle Investment 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 Pinnacle Investment 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 Pinnacle Investment Management, you can compare the effects of market volatilities on Super Retail and Pinnacle Investment 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 Pinnacle Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Super Retail and Pinnacle Investment.
Diversification Opportunities for Super Retail and Pinnacle Investment
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Super and Pinnacle is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Super Retail Group and Pinnacle Investment Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pinnacle Investment 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 Pinnacle Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pinnacle Investment has no effect on the direction of Super Retail i.e., Super Retail and Pinnacle Investment go up and down completely randomly.
Pair Corralation between Super Retail and Pinnacle Investment
Assuming the 90 days trading horizon Super Retail is expected to generate 4.8 times less return on investment than Pinnacle Investment. But when comparing it to its historical volatility, Super Retail Group is 1.6 times less risky than Pinnacle Investment. It trades about 0.1 of its potential returns per unit of risk. Pinnacle Investment Management is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 2,255 in Pinnacle Investment Management on November 3, 2024 and sell it today you would earn a total of 304.00 from holding Pinnacle Investment Management or generate 13.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Super Retail Group vs. Pinnacle Investment Management
Performance |
| Timeline |
| Super Retail Group |
| Pinnacle Investment |
Super Retail and Pinnacle Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Super Retail and Pinnacle Investment
The main advantage of trading using opposite Super Retail and Pinnacle Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Super Retail position performs unexpectedly, Pinnacle Investment 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 Pinnacle Investment will offset losses from the drop in Pinnacle Investment'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 |
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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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