Correlation Between Ditto Public and Super Energy

Can any of the company-specific risk be diversified away by investing in both Ditto Public and Super 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 Ditto Public and Super Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ditto Public and Super Energy, you can compare the effects of market volatilities on Ditto Public and Super 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 Ditto Public with a short position of Super Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ditto Public and Super Energy.

Diversification Opportunities for Ditto Public and Super Energy

-0.09

Correlation Coefficient

Ditto Public  Super Energy

Good diversification

The 3 months correlation between Ditto and Super is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Ditto Public and Super Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Super Energy and Ditto Public 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 Ditto Public are associated (or correlated) with Super Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Super Energy has no effect on the direction of Ditto Public i.e., Ditto Public and Super Energy go up and down completely randomly.

Pair Corralation between Ditto Public and Super Energy

Assuming the 90 days trading horizon Ditto Public is expected to under-perform the Super Energy. But the stock apears to be less risky and, when comparing its historical volatility, Ditto Public is 43.72 times less risky than Super Energy. The stock trades about -0.05 of its potential returns per unit of risk. The Super Energy is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  52.00  in Super Energy on September 12, 2024 and sell it today you would lose (24.00) from holding Super Energy or give up 46.15% of portfolio value over 90 days.

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

Ditto Public  vs.  Super Energy

Ditto Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ditto Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's fundamental drivers remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Super Energy

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Super Energy are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak technical and fundamental indicators, Super Energy reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ditto Public and Super Energy

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

The idea behind Ditto Public and Super 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.