Correlation Between Suzuki and Supernova Energy

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

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

Diversification Opportunities for Suzuki and Supernova Energy

-0.41

Correlation Coefficient

Suzuki  Supernova Energy

Very good diversification

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

Pair Corralation between Suzuki and Supernova Energy

If you would invest  1,000.00  in Suzuki Motor on September 16, 2024 and sell it today you would earn a total of  187.00  from holding Suzuki Motor or generate 18.7% return on investment over 90 days.

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

Suzuki Motor  vs.  Supernova Energy

Suzuki Motor

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Suzuki Motor are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak primary indicators, Suzuki reported solid returns over the last few months and may actually be approaching a breakup point.

Supernova Energy

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Supernova Energy are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Supernova Energy displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Suzuki and Supernova Energy

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

The idea behind Suzuki Motor and Supernova Energy 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.