Correlation Between SUPERVALU INC and Sally Beauty

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Can any of the company-specific risk be diversified away by investing in both SUPERVALU INC and Sally Beauty 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 SUPERVALU INC and Sally Beauty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SUPERVALU INC and Sally Beauty Holdings, you can compare the effects of market volatilities on SUPERVALU INC and Sally Beauty 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 SUPERVALU INC with a short position of Sally Beauty. Check out your portfolio center. Please also check ongoing floating volatility patterns of SUPERVALU INC and Sally Beauty.

Diversification Opportunities for SUPERVALU INC and Sally Beauty

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  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between SUPERVALU and Sally is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SUPERVALU INC and Sally Beauty Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sally Beauty Holdings and SUPERVALU INC 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 SUPERVALU INC are associated (or correlated) with Sally Beauty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sally Beauty Holdings has no effect on the direction of SUPERVALU INC i.e., SUPERVALU INC and Sally Beauty go up and down completely randomly.

Pair Corralation between SUPERVALU INC and Sally Beauty

If you would invest  1,248  in Sally Beauty Holdings on December 30, 2023 and sell it today you would lose (6.00) from holding Sally Beauty Holdings or give up 0.48% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

SUPERVALU INC  vs.  Sally Beauty Holdings

 Performance 
       Timeline  
SUPERVALU INC 

Risk-Adjusted Performance

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Over the last 90 days SUPERVALU INC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, SUPERVALU INC is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.
Sally Beauty Holdings 

Risk-Adjusted Performance

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High
Very Weak
Over the last 90 days Sally Beauty Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental drivers, Sally Beauty is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

SUPERVALU INC and Sally Beauty Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with SUPERVALU INC and Sally Beauty

The main advantage of trading using opposite SUPERVALU INC and Sally Beauty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SUPERVALU INC position performs unexpectedly, Sally Beauty 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 Sally Beauty will offset losses from the drop in Sally Beauty's long position.
The idea behind SUPERVALU INC and Sally Beauty Holdings 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.

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