Correlation Between Superior Industries and Monro Muffler
Can any of the company-specific risk be diversified away by investing in both Superior Industries and Monro Muffler 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 Monro Muffler 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 Monro Muffler Brake, you can compare the effects of market volatilities on Superior Industries and Monro Muffler 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 Monro Muffler. Check out your portfolio center. Please also check ongoing floating volatility patterns of Superior Industries and Monro Muffler.
Diversification Opportunities for Superior Industries and Monro Muffler
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Superior and Monro is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Superior Industries Internatio and Monro Muffler Brake in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Monro Muffler Brake 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 Monro Muffler. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Monro Muffler Brake has no effect on the direction of Superior Industries i.e., Superior Industries and Monro Muffler go up and down completely randomly.
Pair Corralation between Superior Industries and Monro Muffler
Considering the 90-day investment horizon Superior Industries International is expected to generate 2.07 times more return on investment than Monro Muffler. However, Superior Industries is 2.07 times more volatile than Monro Muffler Brake. It trades about 0.11 of its potential returns per unit of risk. Monro Muffler Brake is currently generating about -0.62 per unit of risk. If you would invest 196.00 in Superior Industries International on October 20, 2024 and sell it today you would earn a total of 10.00 from holding Superior Industries International or generate 5.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Superior Industries Internatio vs. Monro Muffler Brake
Performance |
| Timeline |
| Superior Industries |
| Monro Muffler Brake |
Superior Industries and Monro Muffler Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Superior Industries and Monro Muffler
The main advantage of trading using opposite Superior Industries and Monro Muffler positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Superior Industries position performs unexpectedly, Monro Muffler 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 Monro Muffler will offset losses from the drop in Monro Muffler's long position.| Superior Industries vs. Monro Muffler Brake | Superior Industries vs. Dorman Products | Superior Industries vs. Motorcar Parts of | Superior Industries vs. Gentherm |
| Monro Muffler vs. Motorcar Parts of | Monro Muffler vs. Standard Motor Products | Monro Muffler vs. Stoneridge | Monro Muffler vs. Douglas Dynamics |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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