Correlation Between Super Retail and Steamships Trading
Can any of the company-specific risk be diversified away by investing in both Super Retail and Steamships Trading 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 Steamships Trading 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 Steamships Trading, you can compare the effects of market volatilities on Super Retail and Steamships Trading 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 Steamships Trading. Check out your portfolio center. Please also check ongoing floating volatility patterns of Super Retail and Steamships Trading.
Diversification Opportunities for Super Retail and Steamships Trading
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Super and Steamships is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Super Retail Group and Steamships Trading in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Steamships Trading 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 Steamships Trading. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Steamships Trading has no effect on the direction of Super Retail i.e., Super Retail and Steamships Trading go up and down completely randomly.
Pair Corralation between Super Retail and Steamships Trading
Assuming the 90 days trading horizon Super Retail Group is expected to generate 6.49 times more return on investment than Steamships Trading. However, Super Retail is 6.49 times more volatile than Steamships Trading. It trades about 0.02 of its potential returns per unit of risk. Steamships Trading is currently generating about -0.27 per unit of risk. If you would invest 1,481 in Super Retail Group on August 30, 2024 and sell it today you would earn a total of 8.00 from holding Super Retail Group or generate 0.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Super Retail Group vs. Steamships Trading
Performance |
| Timeline |
| Super Retail Group |
| Steamships Trading |
Super Retail and Steamships Trading Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Super Retail and Steamships Trading
The main advantage of trading using opposite Super Retail and Steamships Trading positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Super Retail position performs unexpectedly, Steamships Trading 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 Steamships Trading will offset losses from the drop in Steamships Trading's long position.| Super Retail vs. Aneka Tambang Tbk | Super Retail vs. Unibail Rodamco Westfield SE | Super Retail vs. Macquarie Group | Super Retail vs. Commonwealth Bank |
| Steamships Trading vs. Aneka Tambang Tbk | Steamships Trading vs. BHP Group Limited | Steamships Trading vs. Commonwealth Bank of | Steamships Trading vs. Commonwealth Bank of |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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