Correlation Between ANGLO ASIAN and SUPER GROUP

Can any of the company-specific risk be diversified away by investing in both ANGLO ASIAN and SUPER GROUP 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 ANGLO ASIAN and SUPER GROUP into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ANGLO ASIAN MINING and SUPER GROUP LTD, you can compare the effects of market volatilities on ANGLO ASIAN and SUPER GROUP 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 ANGLO ASIAN with a short position of SUPER GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of ANGLO ASIAN and SUPER GROUP.

Diversification Opportunities for ANGLO ASIAN and SUPER GROUP

-0.1

Correlation Coefficient

ANGLO ASIAN  SUPER GROUP

Good diversification

The 3 months correlation between ANGLO and SUPER is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding ANGLO ASIAN MINING and SUPER GROUP LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SUPER GROUP LTD and ANGLO ASIAN 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 ANGLO ASIAN MINING are associated (or correlated) with SUPER GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SUPER GROUP LTD has no effect on the direction of ANGLO ASIAN i.e., ANGLO ASIAN and SUPER GROUP go up and down completely randomly.

Pair Corralation between ANGLO ASIAN and SUPER GROUP

Assuming the 90 days trading horizon ANGLO ASIAN is expected to generate 4.46 times less return on investment than SUPER GROUP. But when comparing it to its historical volatility, ANGLO ASIAN MINING is 1.42 times less risky than SUPER GROUP. It trades about 0.02 of its potential returns per unit of risk. SUPER GROUP LTD is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  38.00  in SUPER GROUP LTD on October 11, 2024 and sell it today you would earn a total of  111.00  from holding SUPER GROUP LTD or generate 292.11% return on investment over 90 days.

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

ANGLO ASIAN MINING  vs.  SUPER GROUP LTD

ANGLO ASIAN MINING

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ANGLO ASIAN MINING has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, ANGLO ASIAN is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

SUPER GROUP LTD

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SUPER GROUP LTD are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, SUPER GROUP reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ANGLO ASIAN and SUPER GROUP

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

The idea behind ANGLO ASIAN MINING and SUPER GROUP LTD 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.