Correlation Between Super Retail and Resource Base
Can any of the company-specific risk be diversified away by investing in both Super Retail and Resource Base 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 Resource Base 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 Resource Base, you can compare the effects of market volatilities on Super Retail and Resource Base 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 Resource Base. Check out your portfolio center. Please also check ongoing floating volatility patterns of Super Retail and Resource Base.
Diversification Opportunities for Super Retail and Resource Base
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Super and Resource is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Super Retail Group and Resource Base in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Resource Base 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 Resource Base. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Resource Base has no effect on the direction of Super Retail i.e., Super Retail and Resource Base go up and down completely randomly.
Pair Corralation between Super Retail and Resource Base
Assuming the 90 days trading horizon Super Retail Group is expected to generate 0.31 times more return on investment than Resource Base. However, Super Retail Group is 3.24 times less risky than Resource Base. It trades about 0.05 of its potential returns per unit of risk. Resource Base is currently generating about 0.0 per unit of risk. If you would invest 1,036 in Super Retail Group on September 3, 2024 and sell it today you would earn a total of 437.00 from holding Super Retail Group or generate 42.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Super Retail Group vs. Resource Base
Performance |
| Timeline |
| Super Retail Group |
| Resource Base |
Super Retail and Resource Base Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Super Retail and Resource Base
The main advantage of trading using opposite Super Retail and Resource Base positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Super Retail position performs unexpectedly, Resource Base 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 Resource Base will offset losses from the drop in Resource Base's long position.| Super Retail vs. Westpac Banking | Super Retail vs. Champion Iron | Super Retail vs. iShares Global Healthcare | Super Retail vs. Peel Mining |
| Resource Base vs. Northern Star Resources | Resource Base vs. Evolution Mining | Resource Base vs. Bluescope Steel | Resource Base 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |