Correlation Between Superior Industries and SAG Holdings
Can any of the company-specific risk be diversified away by investing in both Superior Industries and SAG Holdings 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 SAG Holdings 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 SAG Holdings Limited, you can compare the effects of market volatilities on Superior Industries and SAG Holdings 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 SAG Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Superior Industries and SAG Holdings.
Diversification Opportunities for Superior Industries and SAG Holdings
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Superior and SAG is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Superior Industries Internatio and SAG Holdings Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SAG Holdings Limited 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 SAG Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SAG Holdings Limited has no effect on the direction of Superior Industries i.e., Superior Industries and SAG Holdings go up and down completely randomly.
Pair Corralation between Superior Industries and SAG Holdings
Considering the 90-day investment horizon Superior Industries International is expected to generate 0.45 times more return on investment than SAG Holdings. However, Superior Industries International is 2.22 times less risky than SAG Holdings. It trades about 0.0 of its potential returns per unit of risk. SAG Holdings Limited is currently generating about -0.42 per unit of risk. If you would invest 282.00 in Superior Industries International on August 26, 2024 and sell it today you would lose (44.00) from holding Superior Industries International or give up 15.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 9.64% |
| Values | Daily Returns |
Superior Industries Internatio vs. SAG Holdings Limited
Performance |
| Timeline |
| Superior Industries |
| SAG Holdings Limited |
Superior Industries and SAG Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Superior Industries and SAG Holdings
The main advantage of trading using opposite Superior Industries and SAG Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Superior Industries position performs unexpectedly, SAG Holdings 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 SAG Holdings will offset losses from the drop in SAG Holdings' long position.| Superior Industries vs. Monro Muffler Brake | Superior Industries vs. Dorman Products | Superior Industries vs. Motorcar Parts of | Superior Industries vs. Gentherm |
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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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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