Correlation Between Superior Industries and Standard
Can any of the company-specific risk be diversified away by investing in both Superior Industries and Standard 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 Standard 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 Standard Motor Products, you can compare the effects of market volatilities on Superior Industries and Standard 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 Standard. Check out your portfolio center. Please also check ongoing floating volatility patterns of Superior Industries and Standard.
Diversification Opportunities for Superior Industries and Standard
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Superior and Standard is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Superior Industries Internatio and Standard Motor Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Standard Motor Products 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 Standard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Standard Motor Products has no effect on the direction of Superior Industries i.e., Superior Industries and Standard go up and down completely randomly.
Pair Corralation between Superior Industries and Standard
Considering the 90-day investment horizon Superior Industries International is expected to under-perform the Standard. But the stock apears to be less risky and, when comparing its historical volatility, Superior Industries International is 1.15 times less risky than Standard. The stock trades about -0.2 of its potential returns per unit of risk. The Standard Motor Products is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 3,160 in Standard Motor Products on August 23, 2024 and sell it today you would earn a total of 57.00 from holding Standard Motor Products or generate 1.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Superior Industries Internatio vs. Standard Motor Products
Performance |
| Timeline |
| Superior Industries |
| Standard Motor Products |
Superior Industries and Standard Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Superior Industries and Standard
The main advantage of trading using opposite Superior Industries and Standard positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Superior Industries position performs unexpectedly, Standard 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 Standard will offset losses from the drop in Standard's long position.| Superior Industries vs. Monro Muffler Brake | Superior Industries vs. Dorman Products | Superior Industries vs. Motorcar Parts of | Superior Industries vs. Gentherm |
| Standard vs. Dorman Products | Standard vs. Motorcar Parts of | Standard vs. Douglas Dynamics | Standard 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Transaction History View history of all your transactions and understand their impact on performance |