Correlation Between Super Retail and Vulcan Steel
Can any of the company-specific risk be diversified away by investing in both Super Retail and Vulcan Steel 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 Vulcan Steel 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 Vulcan Steel, you can compare the effects of market volatilities on Super Retail and Vulcan Steel 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 Vulcan Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Super Retail and Vulcan Steel.
Diversification Opportunities for Super Retail and Vulcan Steel
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Super and Vulcan is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Super Retail Group and Vulcan Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vulcan Steel 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 Vulcan Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vulcan Steel has no effect on the direction of Super Retail i.e., Super Retail and Vulcan Steel go up and down completely randomly.
Pair Corralation between Super Retail and Vulcan Steel
Assuming the 90 days trading horizon Super Retail Group is expected to generate 0.45 times more return on investment than Vulcan Steel. However, Super Retail Group is 2.25 times less risky than Vulcan Steel. It trades about 0.05 of its potential returns per unit of risk. Vulcan Steel is currently generating about -0.01 per unit of risk. If you would invest 1,454 in Super Retail Group on September 1, 2024 and sell it today you would earn a total of 19.00 from holding Super Retail Group or generate 1.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Super Retail Group vs. Vulcan Steel
Performance |
| Timeline |
| Super Retail Group |
| Vulcan Steel |
Super Retail and Vulcan Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Super Retail and Vulcan Steel
The main advantage of trading using opposite Super Retail and Vulcan Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Super Retail position performs unexpectedly, Vulcan Steel 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 Vulcan Steel will offset losses from the drop in Vulcan Steel's long position.| Super Retail vs. Audio Pixels Holdings | Super Retail vs. Iodm | Super Retail vs. Nsx | Super Retail vs. TTG Fintech |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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