Correlation Between Superior Industries and Commercial Vehicle
Can any of the company-specific risk be diversified away by investing in both Superior Industries and Commercial Vehicle 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 Superior Industries and Commercial Vehicle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Superior Industries International and Commercial Vehicle Group, you can compare the effects of market volatilities on Superior Industries and Commercial Vehicle 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 Superior Industries with a short position of Commercial Vehicle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Superior Industries and Commercial Vehicle.
Diversification Opportunities for Superior Industries and Commercial Vehicle
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Superior and Commercial is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Superior Industries Internatio and Commercial Vehicle Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commercial Vehicle and Superior Industries 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 Superior Industries International are associated (or correlated) with Commercial Vehicle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Commercial Vehicle has no effect on the direction of Superior Industries i.e., Superior Industries and Commercial Vehicle go up and down completely randomly.
Pair Corralation between Superior Industries and Commercial Vehicle
Considering the 90-day investment horizon Superior Industries International is expected to generate 0.64 times more return on investment than Commercial Vehicle. However, Superior Industries International is 1.56 times less risky than Commercial Vehicle. It trades about 0.13 of its potential returns per unit of risk. Commercial Vehicle Group is currently generating about -0.16 per unit of risk. If you would invest 204.00 in Superior Industries International on November 1, 2024 and sell it today you would earn a total of 11.00 from holding Superior Industries International or generate 5.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Superior Industries Internatio vs. Commercial Vehicle Group
Performance |
| Timeline |
| Superior Industries |
| Commercial Vehicle |
Superior Industries and Commercial Vehicle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Superior Industries and Commercial Vehicle
The main advantage of trading using opposite Superior Industries and Commercial Vehicle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Superior Industries position performs unexpectedly, Commercial Vehicle 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 Commercial Vehicle will offset losses from the drop in Commercial Vehicle's long position.| Superior Industries vs. Monro Muffler Brake | Superior Industries vs. Dorman Products | Superior Industries vs. Motorcar Parts of | Superior Industries vs. Gentherm |
| Commercial Vehicle vs. Motorcar Parts of | Commercial Vehicle vs. Monro Muffler Brake | Commercial Vehicle vs. Stoneridge | Commercial Vehicle vs. Superior Industries International |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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