Correlation Between TRI Pointe and SUPER HI

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

By analyzing existing cross correlation between TRI Pointe Homes and SUPER HI INTERNATIONAL, you can compare the effects of market volatilities on TRI Pointe and SUPER HI 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 TRI Pointe with a short position of SUPER HI. Check out your portfolio center. Please also check ongoing floating volatility patterns of TRI Pointe and SUPER HI.

Diversification Opportunities for TRI Pointe and SUPER HI

-0.82

Correlation Coefficient

TRI Pointe  SUPER HI

Pay attention - limited upside

The 3 months correlation between TRI and SUPER is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding TRI Pointe Homes and SUPER HI INTERNATIONAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SUPER HI INTERNATIONAL and TRI Pointe 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 TRI Pointe Homes are associated (or correlated) with SUPER HI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SUPER HI INTERNATIONAL has no effect on the direction of TRI Pointe i.e., TRI Pointe and SUPER HI go up and down completely randomly.

Pair Corralation between TRI Pointe and SUPER HI

Considering the 90-day investment horizon TRI Pointe Homes is expected to under-perform the SUPER HI. But the stock apears to be less risky and, when comparing its historical volatility, TRI Pointe Homes is 2.38 times less risky than SUPER HI. The stock trades about -0.12 of its potential returns per unit of risk. The SUPER HI INTERNATIONAL is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  1,686  in SUPER HI INTERNATIONAL on October 23, 2024 and sell it today you would earn a total of  643.00  from holding SUPER HI INTERNATIONAL or generate 38.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	98.36%
Values	Daily Returns

TRI Pointe Homes  vs.  SUPER HI INTERNATIONAL

TRI Pointe Homes

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TRI Pointe Homes 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 February 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

SUPER HI INTERNATIONAL

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SUPER HI INTERNATIONAL are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite quite unsteady fundamental indicators, SUPER HI disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with TRI Pointe and SUPER HI

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

The idea behind TRI Pointe Homes and SUPER HI INTERNATIONAL 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.