Correlation Between Super Retail and Sports Entertainment
Can any of the company-specific risk be diversified away by investing in both Super Retail and Sports Entertainment 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 Sports Entertainment 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 Sports Entertainment Group, you can compare the effects of market volatilities on Super Retail and Sports Entertainment 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 Sports Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Super Retail and Sports Entertainment.
Diversification Opportunities for Super Retail and Sports Entertainment
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Super and Sports is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Super Retail Group and Sports Entertainment Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sports Entertainment 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 Sports Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sports Entertainment has no effect on the direction of Super Retail i.e., Super Retail and Sports Entertainment go up and down completely randomly.
Pair Corralation between Super Retail and Sports Entertainment
Assuming the 90 days trading horizon Super Retail Group is expected to generate 0.31 times more return on investment than Sports Entertainment. However, Super Retail Group is 3.21 times less risky than Sports Entertainment. It trades about 0.16 of its potential returns per unit of risk. Sports Entertainment Group is currently generating about -0.02 per unit of risk. If you would invest 1,463 in Super Retail Group on October 16, 2024 and sell it today you would earn a total of 62.00 from holding Super Retail Group or generate 4.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Super Retail Group vs. Sports Entertainment Group
Performance |
| Timeline |
| Super Retail Group |
| Sports Entertainment |
Super Retail and Sports Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Super Retail and Sports Entertainment
The main advantage of trading using opposite Super Retail and Sports Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Super Retail position performs unexpectedly, Sports Entertainment 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 Sports Entertainment will offset losses from the drop in Sports Entertainment's long position.| Super Retail vs. Charter Hall Retail | Super Retail vs. Everest Metals | Super Retail vs. Falcon Metals | Super Retail vs. ACDC Metals |
| Sports Entertainment vs. Queste Communications | Sports Entertainment vs. TPG Telecom | Sports Entertainment vs. Centuria Industrial Reit | Sports Entertainment vs. Super Retail Group |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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