Correlation Between Superior Plus and ALERION CLEANPOWER

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

Diversification Opportunities for Superior Plus and ALERION CLEANPOWER

-0.24

Correlation Coefficient

Superior Plus  ALERION CLEANPOWER

Very good diversification

The 3 months correlation between Superior and ALERION is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Superior Plus Corp and ALERION CLEANPOWER in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALERION CLEANPOWER 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 ALERION CLEANPOWER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALERION CLEANPOWER has no effect on the direction of Superior Plus i.e., Superior Plus and ALERION CLEANPOWER go up and down completely randomly.

Pair Corralation between Superior Plus and ALERION CLEANPOWER

Assuming the 90 days horizon Superior Plus Corp is expected to generate 0.61 times more return on investment than ALERION CLEANPOWER. However, Superior Plus Corp is 1.65 times less risky than ALERION CLEANPOWER. It trades about 0.02 of its potential returns per unit of risk. ALERION CLEANPOWER is currently generating about -0.01 per unit of risk. If you would invest  415.00  in Superior Plus Corp on December 23, 2024 and sell it today you would earn a total of  5.00  from holding Superior Plus Corp or generate 1.2% return on investment over 90 days.

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

Superior Plus Corp  vs.  ALERION CLEANPOWER

Superior Plus Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Superior Plus Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Superior Plus is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

ALERION CLEANPOWER

Risk-Adjusted Performance

Very Weak

Over the last 90 days ALERION CLEANPOWER has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, ALERION CLEANPOWER is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Superior Plus and ALERION CLEANPOWER

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

The idea behind Superior Plus Corp and ALERION CLEANPOWER 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.

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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.