Correlation Between Arrow Electronics and SOUTHERN
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By analyzing existing cross correlation between Arrow Electronics and SOUTHERN CALIF EDISON, you can compare the effects of market volatilities on Arrow Electronics and SOUTHERN 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 Arrow Electronics with a short position of SOUTHERN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arrow Electronics and SOUTHERN.
Diversification Opportunities for Arrow Electronics and SOUTHERN
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Arrow and SOUTHERN is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Arrow Electronics and SOUTHERN CALIF EDISON in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SOUTHERN CALIF EDISON and Arrow Electronics 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 Arrow Electronics are associated (or correlated) with SOUTHERN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SOUTHERN CALIF EDISON has no effect on the direction of Arrow Electronics i.e., Arrow Electronics and SOUTHERN go up and down completely randomly.
Pair Corralation between Arrow Electronics and SOUTHERN
Considering the 90-day investment horizon Arrow Electronics is expected to generate 2.55 times less return on investment than SOUTHERN. In addition to that, Arrow Electronics is 1.44 times more volatile than SOUTHERN CALIF EDISON. It trades about 0.01 of its total potential returns per unit of risk. SOUTHERN CALIF EDISON is currently generating about 0.02 per unit of volatility. If you would invest 9,860 in SOUTHERN CALIF EDISON on September 4, 2024 and sell it today you would earn a total of 422.00 from holding SOUTHERN CALIF EDISON or generate 4.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 77.33% |
| Values | Daily Returns |
Arrow Electronics vs. SOUTHERN CALIF EDISON
Performance |
| Timeline |
| Arrow Electronics |
| SOUTHERN CALIF EDISON |
Arrow Electronics and SOUTHERN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arrow Electronics and SOUTHERN
The main advantage of trading using opposite Arrow Electronics and SOUTHERN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arrow Electronics position performs unexpectedly, SOUTHERN 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 SOUTHERN will offset losses from the drop in SOUTHERN's long position.| Arrow Electronics vs. Insight Enterprises | Arrow Electronics vs. ScanSource | Arrow Electronics vs. PC Connection | Arrow Electronics vs. Aquagold International |
| SOUTHERN vs. Arrow Electronics | SOUTHERN vs. Nok Airlines Public | SOUTHERN vs. Aegean Airlines SA | SOUTHERN vs. Asure Software |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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