Correlation Between SUPER HI and Arrow Electronics
Can any of the company-specific risk be diversified away by investing in both SUPER HI and Arrow Electronics 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 SUPER HI and Arrow Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SUPER HI INTERNATIONAL and Arrow Electronics, you can compare the effects of market volatilities on SUPER HI and Arrow Electronics 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 SUPER HI with a short position of Arrow Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of SUPER HI and Arrow Electronics.
Diversification Opportunities for SUPER HI and Arrow Electronics
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SUPER and Arrow is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding SUPER HI INTERNATIONAL and Arrow Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arrow Electronics and SUPER HI 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 SUPER HI INTERNATIONAL are associated (or correlated) with Arrow Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arrow Electronics has no effect on the direction of SUPER HI i.e., SUPER HI and Arrow Electronics go up and down completely randomly.
Pair Corralation between SUPER HI and Arrow Electronics
Considering the 90-day investment horizon SUPER HI INTERNATIONAL is expected to generate 2.95 times more return on investment than Arrow Electronics. However, SUPER HI is 2.95 times more volatile than Arrow Electronics. It trades about 0.19 of its potential returns per unit of risk. Arrow Electronics is currently generating about -0.31 per unit of risk. If you would invest 2,385 in SUPER HI INTERNATIONAL on October 11, 2024 and sell it today you would earn a total of 293.00 from holding SUPER HI INTERNATIONAL or generate 12.29% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
SUPER HI INTERNATIONAL vs. Arrow Electronics
Performance |
Timeline |
SUPER HI INTERNATIONAL |
Arrow Electronics |
SUPER HI and Arrow Electronics Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with SUPER HI and Arrow Electronics
The main advantage of trading using opposite SUPER HI and Arrow Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SUPER HI position performs unexpectedly, Arrow Electronics 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 Arrow Electronics will offset losses from the drop in Arrow Electronics' long position.SUPER HI vs. Arrow Electronics | SUPER HI vs. Senmiao Technology | SUPER HI vs. Uber Technologies | SUPER HI vs. Perseus Mining Limited |
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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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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