Correlation Between Superior Plus and STILLFRONT GRP

Can any of the company-specific risk be diversified away by investing in both Superior Plus and STILLFRONT GRP 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 Plus and STILLFRONT GRP into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Superior Plus Corp and STILLFRONT GRP AB, you can compare the effects of market volatilities on Superior Plus and STILLFRONT GRP 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 Plus with a short position of STILLFRONT GRP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Superior Plus and STILLFRONT GRP.

Diversification Opportunities for Superior Plus and STILLFRONT GRP

-0.34

Correlation Coefficient

Superior Plus  STILLFRONT GRP

Very good diversification

The 3 months correlation between Superior and STILLFRONT is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Superior Plus Corp and STILLFRONT GRP AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STILLFRONT GRP AB and Superior Plus 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 Plus Corp are associated (or correlated) with STILLFRONT GRP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STILLFRONT GRP AB has no effect on the direction of Superior Plus i.e., Superior Plus and STILLFRONT GRP go up and down completely randomly.

Pair Corralation between Superior Plus and STILLFRONT GRP

Assuming the 90 days horizon Superior Plus Corp is expected to under-perform the STILLFRONT GRP. But the stock apears to be less risky and, when comparing its historical volatility, Superior Plus Corp is 1.01 times less risky than STILLFRONT GRP. The stock trades about -0.05 of its potential returns per unit of risk. The STILLFRONT GRP AB is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  58.00  in STILLFRONT GRP AB on October 5, 2024 and sell it today you would earn a total of  15.00  from holding STILLFRONT GRP AB or generate 25.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

Superior Plus Corp  vs.  STILLFRONT GRP AB

Superior Plus Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Superior Plus Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

STILLFRONT GRP AB

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in STILLFRONT GRP AB are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, STILLFRONT GRP reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Superior Plus and STILLFRONT GRP

The main advantage of trading using opposite Superior Plus and STILLFRONT GRP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Superior Plus position performs unexpectedly, STILLFRONT GRP 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 STILLFRONT GRP will offset losses from the drop in STILLFRONT GRP's long position.

The idea behind Superior Plus Corp and STILLFRONT GRP AB pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.