Correlation Between Suzuki and Supernova Energy
Can any of the company-specific risk be diversified away by investing in both Suzuki and Supernova Energy 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 Suzuki and Supernova Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Suzuki Motor and Supernova Energy, you can compare the effects of market volatilities on Suzuki and Supernova Energy 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 Suzuki with a short position of Supernova Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Suzuki and Supernova Energy.
Diversification Opportunities for Suzuki and Supernova Energy
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Suzuki and Supernova is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Suzuki Motor and Supernova Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Supernova Energy and Suzuki 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 Suzuki Motor are associated (or correlated) with Supernova Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Supernova Energy has no effect on the direction of Suzuki i.e., Suzuki and Supernova Energy go up and down completely randomly.
Pair Corralation between Suzuki and Supernova Energy
Assuming the 90 days horizon Suzuki is expected to generate 3.64 times less return on investment than Supernova Energy. But when comparing it to its historical volatility, Suzuki Motor is 4.35 times less risky than Supernova Energy. It trades about 0.05 of its potential returns per unit of risk. Supernova Energy is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 0.40 in Supernova Energy on September 12, 2024 and sell it today you would lose (0.37) from holding Supernova Energy or give up 92.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 55.45% |
| Values | Daily Returns |
Suzuki Motor vs. Supernova Energy
Performance |
| Timeline |
| Suzuki Motor |
| Supernova Energy |
Suzuki and Supernova Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Suzuki and Supernova Energy
The main advantage of trading using opposite Suzuki and Supernova Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Suzuki position performs unexpectedly, Supernova Energy 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 Supernova Energy will offset losses from the drop in Supernova Energy's long position.| Suzuki vs. Volkswagen AG 110 | Suzuki vs. Porsche Automobil Holding | Suzuki vs. Ferrari NV | Suzuki vs. Bayerische Motoren Werke |
| Supernova Energy vs. POSCO Holdings | Supernova Energy vs. Schweizerische Nationalbank | Supernova Energy vs. Berkshire Hathaway | Supernova Energy vs. Berkshire Hathaway |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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