Correlation Between Superior Plus and 2G ENERGY

Can any of the company-specific risk be diversified away by investing in both Superior Plus and 2G 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 Superior Plus and 2G ENERGY 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 2G ENERGY , you can compare the effects of market volatilities on Superior Plus and 2G 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 Superior Plus with a short position of 2G ENERGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Superior Plus and 2G ENERGY.

Diversification Opportunities for Superior Plus and 2G ENERGY

-0.34

Correlation Coefficient

Superior Plus  2G ENERGY

Very good diversification

The 3 months correlation between Superior and 2GB is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Superior Plus Corp and 2G ENERGY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 2G ENERGY 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 2G ENERGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 2G ENERGY has no effect on the direction of Superior Plus i.e., Superior Plus and 2G ENERGY go up and down completely randomly.

Pair Corralation between Superior Plus and 2G ENERGY

Assuming the 90 days horizon Superior Plus Corp is expected to under-perform the 2G ENERGY. In addition to that, Superior Plus is 1.2 times more volatile than 2G ENERGY . It trades about -0.08 of its total potential returns per unit of risk. 2G ENERGY is currently generating about -0.04 per unit of volatility. If you would invest  2,543  in 2G ENERGY on August 30, 2024 and sell it today you would lose (363.00) from holding 2G ENERGY or give up 14.27% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Superior Plus Corp  vs.  2G ENERGY

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 fragile 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.

2G ENERGY

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in 2G ENERGY are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable fundamental drivers, 2G ENERGY is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Superior Plus and 2G ENERGY

The main advantage of trading using opposite Superior Plus and 2G ENERGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Superior Plus position performs unexpectedly, 2G 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 2G ENERGY will offset losses from the drop in 2G ENERGY's long position.

The idea behind Superior Plus Corp and 2G ENERGY 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.