Correlation Between Super Retail and FOS Capital

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

Diversification Opportunities for Super Retail and FOS Capital

0.44

Correlation Coefficient

Super Retail  FOS Capital

Very weak diversification

The 3 months correlation between Super and FOS is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Super Retail Group and FOS Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FOS Capital 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 FOS Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FOS Capital has no effect on the direction of Super Retail i.e., Super Retail and FOS Capital go up and down completely randomly.

Pair Corralation between Super Retail and FOS Capital

Assuming the 90 days trading horizon Super Retail Group is expected to generate 0.39 times more return on investment than FOS Capital. However, Super Retail Group is 2.56 times less risky than FOS Capital. It trades about 0.22 of its potential returns per unit of risk. FOS Capital is currently generating about 0.03 per unit of risk. If you would invest  1,257  in Super Retail Group on April 20, 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

Super Retail Group  vs.  FOS Capital

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.

FOS Capital

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in FOS Capital are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, FOS Capital may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Super Retail and FOS Capital

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

The idea behind Super Retail Group and FOS Capital 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.