Correlation Between Artesian Resources and York Water
Can any of the company-specific risk be diversified away by investing in both Artesian Resources and York Water 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 Artesian Resources and York Water into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Artesian Resources and The York Water, you can compare the effects of market volatilities on Artesian Resources and York Water 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 Artesian Resources with a short position of York Water. Check out your portfolio center. Please also check ongoing floating volatility patterns of Artesian Resources and York Water.
Diversification Opportunities for Artesian Resources and York Water
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Artesian and York is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Artesian Resources and The York Water in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on York Water and Artesian Resources 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 Artesian Resources are associated (or correlated) with York Water. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of York Water has no effect on the direction of Artesian Resources i.e., Artesian Resources and York Water go up and down completely randomly.
Pair Corralation between Artesian Resources and York Water
Assuming the 90 days horizon Artesian Resources is expected to generate 1.44 times more return on investment than York Water. However, Artesian Resources is 1.44 times more volatile than The York Water. It trades about -0.01 of its potential returns per unit of risk. The York Water is currently generating about -0.11 per unit of risk. If you would invest 3,434 in Artesian Resources on August 24, 2024 and sell it today you would lose (30.00) from holding Artesian Resources or give up 0.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Artesian Resources vs. The York Water
Performance |
| Timeline |
| Artesian Resources |
| York Water |
Artesian Resources and York Water Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Artesian Resources and York Water
The main advantage of trading using opposite Artesian Resources and York Water positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Artesian Resources position performs unexpectedly, York Water 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 York Water will offset losses from the drop in York Water's long position.| Artesian Resources vs. California Water Service | Artesian Resources vs. SJW Group Common | Artesian Resources vs. The York Water | Artesian Resources vs. American States Water |
| York Water vs. California Water Service | York Water vs. SJW Group Common | York Water vs. Artesian Resources | York Water vs. American States Water |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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