Correlation Between Black Hills and Suburban Propane
Can any of the company-specific risk be diversified away by investing in both Black Hills and Suburban Propane 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 Black Hills and Suburban Propane into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Black Hills and Suburban Propane Partners, you can compare the effects of market volatilities on Black Hills and Suburban Propane 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 Black Hills with a short position of Suburban Propane. Check out your portfolio center. Please also check ongoing floating volatility patterns of Black Hills and Suburban Propane.
Diversification Opportunities for Black Hills and Suburban Propane
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Black and Suburban is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Black Hills and Suburban Propane Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Suburban Propane Partners and Black Hills 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 Black Hills are associated (or correlated) with Suburban Propane. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Suburban Propane Partners has no effect on the direction of Black Hills i.e., Black Hills and Suburban Propane go up and down completely randomly.
Pair Corralation between Black Hills and Suburban Propane
Considering the 90-day investment horizon Black Hills is expected to generate 0.63 times more return on investment than Suburban Propane. However, Black Hills is 1.58 times less risky than Suburban Propane. It trades about 0.11 of its potential returns per unit of risk. Suburban Propane Partners is currently generating about 0.02 per unit of risk. If you would invest 5,513 in Black Hills on September 1, 2024 and sell it today you would earn a total of 894.00 from holding Black Hills or generate 16.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Black Hills vs. Suburban Propane Partners
Performance |
| Timeline |
| Black Hills |
| Suburban Propane Partners |
Black Hills and Suburban Propane Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Black Hills and Suburban Propane
The main advantage of trading using opposite Black Hills and Suburban Propane positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Black Hills position performs unexpectedly, Suburban Propane 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 Suburban Propane will offset losses from the drop in Suburban Propane's long position.| Black Hills vs. NorthWestern | Black Hills vs. Avista | Black Hills vs. Otter Tail | Black Hills vs. Companhia Paranaense de |
| Suburban Propane vs. Northwest Natural Gas | Suburban Propane vs. Atmos Energy | Suburban Propane vs. One Gas | Suburban Propane vs. NiSource |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |