Correlation Between Superior Plus and Nasdaq
Can any of the company-specific risk be diversified away by investing in both Superior Plus and Nasdaq 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 Nasdaq 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 Nasdaq Inc, you can compare the effects of market volatilities on Superior Plus and Nasdaq 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 Nasdaq. Check out your portfolio center. Please also check ongoing floating volatility patterns of Superior Plus and Nasdaq.
Diversification Opportunities for Superior Plus and Nasdaq
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Superior and Nasdaq is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Superior Plus Corp and Nasdaq Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nasdaq Inc 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 Nasdaq. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nasdaq Inc has no effect on the direction of Superior Plus i.e., Superior Plus and Nasdaq go up and down completely randomly.
Pair Corralation between Superior Plus and Nasdaq
Assuming the 90 days horizon Superior Plus Corp is expected to generate 1.46 times more return on investment than Nasdaq. However, Superior Plus is 1.46 times more volatile than Nasdaq Inc. It trades about 0.25 of its potential returns per unit of risk. Nasdaq Inc is currently generating about -0.07 per unit of risk. If you would invest 394.00 in Superior Plus Corp on December 5, 2024 and sell it today you would earn a total of 52.00 from holding Superior Plus Corp or generate 13.2% 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. Nasdaq Inc
Performance |
Timeline |
Superior Plus Corp |
Nasdaq Inc |
Superior Plus and Nasdaq Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Superior Plus and Nasdaq
The main advantage of trading using opposite Superior Plus and Nasdaq positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Superior Plus position performs unexpectedly, Nasdaq 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 Nasdaq will offset losses from the drop in Nasdaq's long position.Superior Plus vs. Goodyear Tire Rubber | Superior Plus vs. ECHO INVESTMENT ZY | Superior Plus vs. Heidelberg Materials AG | Superior Plus vs. Hyster Yale Materials Handling |
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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