Correlation Between Super Retail and Truscott Mining
Can any of the company-specific risk be diversified away by investing in both Super Retail and Truscott Mining 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 Truscott Mining 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 Truscott Mining Corp, you can compare the effects of market volatilities on Super Retail and Truscott Mining 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 Truscott Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Super Retail and Truscott Mining.
Diversification Opportunities for Super Retail and Truscott Mining
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Super and Truscott is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Super Retail Group and Truscott Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Truscott Mining Corp 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 Truscott Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Truscott Mining Corp has no effect on the direction of Super Retail i.e., Super Retail and Truscott Mining go up and down completely randomly.
Pair Corralation between Super Retail and Truscott Mining
Assuming the 90 days trading horizon Super Retail is expected to generate 8.55 times less return on investment than Truscott Mining. But when comparing it to its historical volatility, Super Retail Group is 1.87 times less risky than Truscott Mining. It trades about 0.02 of its potential returns per unit of risk. Truscott Mining Corp is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 5.00 in Truscott Mining Corp on November 3, 2024 and sell it today you would earn a total of 2.80 from holding Truscott Mining Corp or generate 56.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Super Retail Group vs. Truscott Mining Corp
Performance |
| Timeline |
| Super Retail Group |
| Truscott Mining Corp |
Super Retail and Truscott Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Super Retail and Truscott Mining
The main advantage of trading using opposite Super Retail and Truscott Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Super Retail position performs unexpectedly, Truscott Mining 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 Truscott Mining will offset losses from the drop in Truscott Mining'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 |
| Truscott Mining vs. Perseus Mining | Truscott Mining vs. DMC Mining | Truscott Mining vs. Peel Mining | Truscott Mining vs. Pinnacle Investment Management |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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