Correlation Between Bill and SOUTHWESTERN
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By analyzing existing cross correlation between Bill Com Holdings and SOUTHWESTERN ELEC PWR, you can compare the effects of market volatilities on Bill and SOUTHWESTERN 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 Bill with a short position of SOUTHWESTERN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bill and SOUTHWESTERN.
Diversification Opportunities for Bill and SOUTHWESTERN
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bill and SOUTHWESTERN is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Bill Com Holdings and SOUTHWESTERN ELEC PWR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SOUTHWESTERN ELEC PWR and Bill 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 Bill Com Holdings are associated (or correlated) with SOUTHWESTERN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SOUTHWESTERN ELEC PWR has no effect on the direction of Bill i.e., Bill and SOUTHWESTERN go up and down completely randomly.
Pair Corralation between Bill and SOUTHWESTERN
Given the investment horizon of 90 days Bill is expected to generate 124.23 times less return on investment than SOUTHWESTERN. But when comparing it to its historical volatility, Bill Com Holdings is 12.91 times less risky than SOUTHWESTERN. It trades about 0.0 of its potential returns per unit of risk. SOUTHWESTERN ELEC PWR is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 9,380 in SOUTHWESTERN ELEC PWR on September 3, 2024 and sell it today you would earn a total of 91.00 from holding SOUTHWESTERN ELEC PWR or generate 0.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 87.88% |
| Values | Daily Returns |
Bill Com Holdings vs. SOUTHWESTERN ELEC PWR
Performance |
| Timeline |
| Bill Com Holdings |
| SOUTHWESTERN ELEC PWR |
Bill and SOUTHWESTERN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bill and SOUTHWESTERN
The main advantage of trading using opposite Bill and SOUTHWESTERN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bill position performs unexpectedly, SOUTHWESTERN 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 SOUTHWESTERN will offset losses from the drop in SOUTHWESTERN's long position.The idea behind Bill Com Holdings and SOUTHWESTERN ELEC PWR 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.| SOUTHWESTERN vs. Asure Software | SOUTHWESTERN vs. Sapiens International | SOUTHWESTERN vs. CarsalesCom Ltd ADR | SOUTHWESTERN vs. Bill Com Holdings |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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