Correlation Between Superior Industries and SES AI
Can any of the company-specific risk be diversified away by investing in both Superior Industries and SES AI 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 SES AI 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 SES AI Corp, you can compare the effects of market volatilities on Superior Industries and SES AI 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 SES AI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Superior Industries and SES AI.
Diversification Opportunities for Superior Industries and SES AI
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Superior and SES is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Superior Industries Internatio and SES AI Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SES AI Corp 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 SES AI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SES AI Corp has no effect on the direction of Superior Industries i.e., Superior Industries and SES AI go up and down completely randomly.
Pair Corralation between Superior Industries and SES AI
Considering the 90-day investment horizon Superior Industries International is expected to generate 0.41 times more return on investment than SES AI. However, Superior Industries International is 2.41 times less risky than SES AI. It trades about -0.2 of its potential returns per unit of risk. SES AI Corp is currently generating about -0.27 per unit of risk. If you would invest 351.00 in Superior Industries International on August 23, 2024 and sell it today you would lose (108.00) from holding Superior Industries International or give up 30.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Superior Industries Internatio vs. SES AI Corp
Performance |
| Timeline |
| Superior Industries |
| SES AI Corp |
Superior Industries and SES AI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Superior Industries and SES AI
The main advantage of trading using opposite Superior Industries and SES AI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Superior Industries position performs unexpectedly, SES AI 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 SES AI will offset losses from the drop in SES AI's long position.| Superior Industries vs. Monro Muffler Brake | Superior Industries vs. Dorman Products | Superior Industries vs. Motorcar Parts of | Superior Industries vs. Gentherm |
| SES AI vs. Cooper Stnd | SES AI vs. Motorcar Parts of | SES AI vs. American Axle Manufacturing | SES AI vs. Stoneridge |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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