Correlation Between Clean Seas and Super Retail

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

By analyzing existing cross correlation between Clean Seas Seafood and Super Retail Group, you can compare the effects of market volatilities on Clean Seas and Super Retail 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 Clean Seas with a short position of Super Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clean Seas and Super Retail.

Diversification Opportunities for Clean Seas and Super Retail

0.58

Correlation Coefficient

Clean Seas  Super Retail

Very weak diversification

The 3 months correlation between Clean and Super is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Clean Seas Seafood and Super Retail Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Super Retail Group and Clean Seas 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 Clean Seas Seafood are associated (or correlated) with Super Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Super Retail Group has no effect on the direction of Clean Seas i.e., Clean Seas and Super Retail go up and down completely randomly.

Pair Corralation between Clean Seas and Super Retail

Assuming the 90 days trading horizon Clean Seas is expected to generate 2.43 times less return on investment than Super Retail. But when comparing it to its historical volatility, Clean Seas Seafood is 1.38 times less risky than Super Retail. It trades about 0.13 of its potential returns per unit of risk. Super Retail Group is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  1,257  in Super Retail Group on April 21, 2025 and sell it today you would earn a total of  250.00  from holding Super Retail Group or generate 19.89% return on investment over 90 days.

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

Clean Seas Seafood  vs.  Super Retail Group

Clean Seas Seafood

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Clean Seas Seafood are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Clean Seas may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Super Retail Group

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Super Retail Group are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain essential indicators, Super Retail unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Clean Seas and Super Retail

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

The idea behind Clean Seas Seafood and Super Retail Group 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.