Correlation Between Superior Industries and Cooper Stnd

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

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

Diversification Opportunities for Superior Industries and Cooper Stnd

0.41

Correlation Coefficient

Superior Industries  Cooper Stnd

Very weak diversification

The 3 months correlation between Superior and Cooper is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Superior Industries Internatio and Cooper Stnd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cooper Stnd and Superior Industries 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 Industries International are associated (or correlated) with Cooper Stnd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cooper Stnd has no effect on the direction of Superior Industries i.e., Superior Industries and Cooper Stnd go up and down completely randomly.

Pair Corralation between Superior Industries and Cooper Stnd

Considering the 90-day investment horizon Superior Industries is expected to generate 1.42 times less return on investment than Cooper Stnd. In addition to that, Superior Industries is 1.14 times more volatile than Cooper Stnd. It trades about 0.05 of its total potential returns per unit of risk. Cooper Stnd is currently generating about 0.08 per unit of volatility. If you would invest  1,369  in Cooper Stnd on December 29, 2024 and sell it today you would earn a total of  235.00  from holding Cooper Stnd or generate 17.17% return on investment over 90 days.

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

Superior Industries Internatio  vs.  Cooper Stnd

Superior Industries

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Superior Industries International are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating basic indicators, Superior Industries reported solid returns over the last few months and may actually be approaching a breakup point.

Cooper Stnd

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Cooper Stnd are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Cooper Stnd unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Superior Industries and Cooper Stnd

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

The idea behind Superior Industries International and Cooper Stnd 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.