Correlation Between Superior Uniform and Oxford Industries

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

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

Diversification Opportunities for Superior Uniform and Oxford Industries

-0.25

Correlation Coefficient

Superior Uniform  Oxford Industries

Very good diversification

The 3 months correlation between Superior and Oxford is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Superior Uniform Group and Oxford Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oxford Industries and Superior Uniform 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 Superior Uniform Group are associated (or correlated) with Oxford Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oxford Industries has no effect on the direction of Superior Uniform i.e., Superior Uniform and Oxford Industries go up and down completely randomly.

Pair Corralation between Superior Uniform and Oxford Industries

Considering the 90-day investment horizon Superior Uniform Group is expected to generate 1.06 times more return on investment than Oxford Industries. However, Superior Uniform is 1.06 times more volatile than Oxford Industries. It trades about 0.13 of its potential returns per unit of risk. Oxford Industries is currently generating about -0.02 per unit of risk. If you would invest  1,436  in Superior Uniform Group on August 30, 2024 and sell it today you would earn a total of  253.00  from holding Superior Uniform Group or generate 17.62% return on investment over 90 days.

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

Superior Uniform Group  vs.  Oxford Industries

Superior Uniform

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Superior Uniform Group are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Superior Uniform exhibited solid returns over the last few months and may actually be approaching a breakup point.

Oxford Industries

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Oxford Industries has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Oxford Industries is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Superior Uniform and Oxford Industries

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

The idea behind Superior Uniform Group and Oxford Industries 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.