Correlation Between Superior Plus and Cellink AB

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

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

Diversification Opportunities for Superior Plus and Cellink AB

0.74

Correlation Coefficient

Superior Plus  Cellink AB

Poor diversification

The 3 months correlation between Superior and Cellink is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Superior Plus Corp and Cellink AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cellink AB and Superior Plus 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 Plus Corp are associated (or correlated) with Cellink AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cellink AB has no effect on the direction of Superior Plus i.e., Superior Plus and Cellink AB go up and down completely randomly.

Pair Corralation between Superior Plus and Cellink AB

Assuming the 90 days horizon Superior Plus Corp is expected to generate 0.62 times more return on investment than Cellink AB. However, Superior Plus Corp is 1.62 times less risky than Cellink AB. It trades about 0.05 of its potential returns per unit of risk. Cellink AB is currently generating about -0.07 per unit of risk. If you would invest  428.00  in Superior Plus Corp on September 5, 2024 and sell it today you would earn a total of  12.00  from holding Superior Plus Corp or generate 2.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.65%
Values	Daily Returns

Superior Plus Corp  vs.  Cellink AB

Superior Plus Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Superior Plus Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Cellink AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cellink AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Superior Plus and Cellink AB

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

The idea behind Superior Plus Corp and Cellink AB 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.