Correlation Between Marubeni and Superior Plus

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

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

Diversification Opportunities for Marubeni and Superior Plus

0.3

Correlation Coefficient

Marubeni  Superior Plus

Weak diversification

The 3 months correlation between Marubeni and Superior is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Marubeni and Superior Plus Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Superior Plus Corp and Marubeni 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 Marubeni are associated (or correlated) with Superior Plus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Superior Plus Corp has no effect on the direction of Marubeni i.e., Marubeni and Superior Plus go up and down completely randomly.

Pair Corralation between Marubeni and Superior Plus

Assuming the 90 days trading horizon Marubeni is expected to generate 1.02 times more return on investment than Superior Plus. However, Marubeni is 1.02 times more volatile than Superior Plus Corp. It trades about 0.03 of its potential returns per unit of risk. Superior Plus Corp is currently generating about -0.03 per unit of risk. If you would invest  1,138  in Marubeni on October 21, 2024 and sell it today you would earn a total of  255.00  from holding Marubeni or generate 22.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Marubeni  vs.  Superior Plus Corp

Marubeni

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Marubeni has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Marubeni is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Superior Plus Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Superior Plus Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Marubeni and Superior Plus

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

The idea behind Marubeni and Superior Plus Corp 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.