Correlation Between Seven West and Super Retail
Can any of the company-specific risk be diversified away by investing in both Seven West and Super Retail 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 Seven West and Super Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Seven West Media and Super Retail Group, you can compare the effects of market volatilities on Seven West and Super Retail 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 Seven West with a short position of Super Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seven West and Super Retail.
Diversification Opportunities for Seven West and Super Retail
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Seven and Super is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Seven West Media and Super Retail Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Super Retail Group and Seven West 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 Seven West Media are associated (or correlated) with Super Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Super Retail Group has no effect on the direction of Seven West i.e., Seven West and Super Retail go up and down completely randomly.
Pair Corralation between Seven West and Super Retail
Assuming the 90 days trading horizon Seven West Media is expected to under-perform the Super Retail. In addition to that, Seven West is 1.75 times more volatile than Super Retail Group. It trades about -0.03 of its total potential returns per unit of risk. Super Retail Group is currently generating about 0.07 per unit of volatility. If you would invest 1,290 in Super Retail Group on August 30, 2024 and sell it today you would earn a total of 191.00 from holding Super Retail Group or generate 14.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Seven West Media vs. Super Retail Group
Performance |
| Timeline |
| Seven West Media |
| Super Retail Group |
Seven West and Super Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seven West and Super Retail
The main advantage of trading using opposite Seven West and Super Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seven West position performs unexpectedly, Super Retail 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 Super Retail will offset losses from the drop in Super Retail's long position.| Seven West vs. Aneka Tambang Tbk | Seven West vs. National Australia Bank | Seven West vs. Commonwealth Bank of | Seven West vs. Commonwealth Bank of |
| Super Retail vs. Aneka Tambang Tbk | Super Retail vs. Unibail Rodamco Westfield SE | Super Retail vs. Macquarie Group | Super Retail vs. Commonwealth Bank |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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