Correlation Between COMPUTERSHARE and Suncorp Group

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

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

Diversification Opportunities for COMPUTERSHARE and Suncorp Group

-0.19

Correlation Coefficient

COMPUTERSHARE  Suncorp Group

Good diversification

The 3 months correlation between COMPUTERSHARE and Suncorp is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding COMPUTERSHARE and Suncorp Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Suncorp Group Limited and COMPUTERSHARE 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 COMPUTERSHARE are associated (or correlated) with Suncorp Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Suncorp Group Limited has no effect on the direction of COMPUTERSHARE i.e., COMPUTERSHARE and Suncorp Group go up and down completely randomly.

Pair Corralation between COMPUTERSHARE and Suncorp Group

Assuming the 90 days trading horizon COMPUTERSHARE is expected to generate 0.62 times more return on investment than Suncorp Group. However, COMPUTERSHARE is 1.6 times less risky than Suncorp Group. It trades about 0.1 of its potential returns per unit of risk. Suncorp Group Limited is currently generating about -0.05 per unit of risk. If you would invest  1,999  in COMPUTERSHARE on December 25, 2024 and sell it today you would earn a total of  281.00  from holding COMPUTERSHARE or generate 14.06% return on investment over 90 days.

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

COMPUTERSHARE  vs.  Suncorp Group Limited

COMPUTERSHARE

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in COMPUTERSHARE are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical indicators, COMPUTERSHARE exhibited solid returns over the last few months and may actually be approaching a breakup point.

Suncorp Group Limited

Risk-Adjusted Performance

Very Weak

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

Pair Trading with COMPUTERSHARE and Suncorp Group

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

The idea behind COMPUTERSHARE and Suncorp Group Limited 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.

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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.