Correlation Between Superior Plus and HAMMONIA Schiffsholding

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

Diversification Opportunities for Superior Plus and HAMMONIA Schiffsholding

0.05

Correlation Coefficient

Superior Plus  HAMMONIA Schiffsholding

Significant diversification

The 3 months correlation between Superior and HAMMONIA is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Superior Plus Corp and HAMMONIA Schiffsholding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HAMMONIA Schiffsholding 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 HAMMONIA Schiffsholding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HAMMONIA Schiffsholding has no effect on the direction of Superior Plus i.e., Superior Plus and HAMMONIA Schiffsholding go up and down completely randomly.

Pair Corralation between Superior Plus and HAMMONIA Schiffsholding

Assuming the 90 days horizon Superior Plus Corp is expected to under-perform the HAMMONIA Schiffsholding. In addition to that, Superior Plus is 1.56 times more volatile than HAMMONIA Schiffsholding AG. It trades about -0.06 of its total potential returns per unit of risk. HAMMONIA Schiffsholding AG is currently generating about -0.04 per unit of volatility. If you would invest  30,400  in HAMMONIA Schiffsholding AG on September 19, 2024 and sell it today you would lose (2,200) from holding HAMMONIA Schiffsholding AG or give up 7.24% of portfolio value over 90 days.

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

Superior Plus Corp  vs.  HAMMONIA Schiffsholding AG

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 uncertain 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.

HAMMONIA Schiffsholding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HAMMONIA Schiffsholding AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, HAMMONIA Schiffsholding is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Superior Plus and HAMMONIA Schiffsholding

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

The idea behind Superior Plus Corp and HAMMONIA Schiffsholding AG 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.