Correlation Between Super Retail and Autosports

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

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

Diversification Opportunities for Super Retail and Autosports

0.82

Correlation Coefficient

Super Retail  Autosports

Very poor diversification

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

Pair Corralation between Super Retail and Autosports

Assuming the 90 days trading horizon Super Retail is expected to generate 2.02 times less return on investment than Autosports. But when comparing it to its historical volatility, Super Retail Group is 1.66 times less risky than Autosports. It trades about 0.19 of its potential returns per unit of risk. Autosports Group is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest  182.00  in Autosports Group on April 25, 2025 and sell it today you would earn a total of  63.00  from holding Autosports Group or generate 34.62% return on investment over 90 days.

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

Super Retail Group  vs.  Autosports Group

Super Retail Group

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Super Retail Group are ranked lower than 14 (%) 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.

Autosports Group

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Autosports Group are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical and fundamental indicators, Autosports unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Super Retail and Autosports

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

The idea behind Super Retail Group and Autosports 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.

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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.