Correlation Between Superior Industries and Stoneridge

Can any of the company-specific risk be diversified away by investing in both Superior Industries and Stoneridge 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 Stoneridge 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 Stoneridge, you can compare the effects of market volatilities on Superior Industries and Stoneridge 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 Stoneridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Superior Industries and Stoneridge.

Diversification Opportunities for Superior Industries and Stoneridge

0.76

Correlation Coefficient

Superior Industries  Stoneridge

Poor diversification

The 3 months correlation between Superior and Stoneridge is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Superior Industries Internatio and Stoneridge in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stoneridge 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 Stoneridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stoneridge has no effect on the direction of Superior Industries i.e., Superior Industries and Stoneridge go up and down completely randomly.

Pair Corralation between Superior Industries and Stoneridge

Considering the 90-day investment horizon Superior Industries International is expected to generate 1.06 times more return on investment than Stoneridge. However, Superior Industries is 1.06 times more volatile than Stoneridge. It trades about -0.06 of its potential returns per unit of risk. Stoneridge is currently generating about -0.08 per unit of risk. If you would invest  635.00  in Superior Industries International on November 28, 2024 and sell it today you would lose (454.00) from holding Superior Industries International or give up 71.5% of portfolio value over 90 days.

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

Superior Industries Internatio  vs.  Stoneridge

Superior Industries

Risk-Adjusted Performance

Very Weak

Over the last 90 days Superior Industries International has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unfluctuating performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in March 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Stoneridge

Risk-Adjusted Performance

Very Weak

Over the last 90 days Stoneridge has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in March 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Superior Industries and Stoneridge

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

The idea behind Superior Industries International and Stoneridge 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.