Correlation Between Superior Plus and Gibson Energy

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

Diversification Opportunities for Superior Plus and Gibson Energy

-0.55

Correlation Coefficient

Superior Plus  Gibson Energy

Excellent diversification

The 3 months correlation between Superior and Gibson is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Superior Plus Corp and Gibson Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gibson Energy 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 Gibson Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gibson Energy has no effect on the direction of Superior Plus i.e., Superior Plus and Gibson Energy go up and down completely randomly.

Pair Corralation between Superior Plus and Gibson Energy

Assuming the 90 days trading horizon Superior Plus Corp is expected to under-perform the Gibson Energy. In addition to that, Superior Plus is 3.29 times more volatile than Gibson Energy. It trades about -0.04 of its total potential returns per unit of risk. Gibson Energy is currently generating about 0.15 per unit of volatility. If you would invest  2,166  in Gibson Energy on September 2, 2024 and sell it today you would earn a total of  195.00  from holding Gibson Energy or generate 9.0% return on investment over 90 days.

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

Superior Plus Corp  vs.  Gibson Energy

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. In spite of latest unfluctuating performance, the Stock's fundamental drivers remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Gibson Energy

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Gibson Energy are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating forward indicators, Gibson Energy may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Superior Plus and Gibson Energy

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

The idea behind Superior Plus Corp and Gibson 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.