Correlation Between Super Retail and Whitefield Industrials

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

Diversification Opportunities for Super Retail and Whitefield Industrials

0.88

Correlation Coefficient

Super Retail  Whitefield Industrials

Very poor diversification

The 3 months correlation between Super and Whitefield is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Super Retail Group and Whitefield Industrials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Whitefield Industrials 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 Whitefield Industrials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Whitefield Industrials has no effect on the direction of Super Retail i.e., Super Retail and Whitefield Industrials go up and down completely randomly.

Pair Corralation between Super Retail and Whitefield Industrials

Assuming the 90 days trading horizon Super Retail is expected to generate 2.29 times less return on investment than Whitefield Industrials. In addition to that, Super Retail is 1.28 times more volatile than Whitefield Industrials. It trades about 0.05 of its total potential returns per unit of risk. Whitefield Industrials is currently generating about 0.13 per unit of volatility. If you would invest  555.00  in Whitefield Industrials on April 3, 2025 and sell it today you would earn a total of  15.00  from holding Whitefield Industrials or generate 2.7% 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.  Whitefield Industrials

Super Retail Group

Risk-Adjusted Performance

OK

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

Whitefield Industrials

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Whitefield Industrials are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical and fundamental indicators, Whitefield Industrials may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Super Retail and Whitefield Industrials

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

The idea behind Super Retail Group and Whitefield Industrials 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.