Correlation Between Superior Plus and Safety Insurance
Can any of the company-specific risk be diversified away by investing in both Superior Plus and Safety Insurance 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 Safety Insurance 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 Safety Insurance Group, you can compare the effects of market volatilities on Superior Plus and Safety Insurance 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 Safety Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Superior Plus and Safety Insurance.
Diversification Opportunities for Superior Plus and Safety Insurance
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Superior and Safety is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Superior Plus Corp and Safety Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Safety Insurance 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 Safety Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Safety Insurance has no effect on the direction of Superior Plus i.e., Superior Plus and Safety Insurance go up and down completely randomly.
Pair Corralation between Superior Plus and Safety Insurance
Assuming the 90 days horizon Superior Plus Corp is expected to under-perform the Safety Insurance. In addition to that, Superior Plus is 1.47 times more volatile than Safety Insurance Group. It trades about -0.04 of its total potential returns per unit of risk. Safety Insurance Group is currently generating about 0.02 per unit of volatility. If you would invest 6,899 in Safety Insurance Group on December 2, 2024 and sell it today you would earn a total of 401.00 from holding Safety Insurance Group or generate 5.81% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Superior Plus Corp vs. Safety Insurance Group
Performance |
Timeline |
Superior Plus Corp |
Safety Insurance |
Superior Plus and Safety Insurance Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Superior Plus and Safety Insurance
The main advantage of trading using opposite Superior Plus and Safety Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Superior Plus position performs unexpectedly, Safety Insurance 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 Safety Insurance will offset losses from the drop in Safety Insurance's long position.Superior Plus vs. Indutrade AB | Superior Plus vs. Tower One Wireless | Superior Plus vs. OFFICE DEPOT | Superior Plus vs. alstria office REIT AG |
Safety Insurance vs. Ross Stores | Safety Insurance vs. MICRONIC MYDATA | Safety Insurance vs. MARKET VECTR RETAIL | Safety Insurance vs. H2O Retailing |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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