Correlation Between Cebu Air and Suburban Propane
Can any of the company-specific risk be diversified away by investing in both Cebu Air 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 Cebu Air and Suburban Propane into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cebu Air ADR and Suburban Propane Partners, you can compare the effects of market volatilities on Cebu Air 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 Cebu Air with a short position of Suburban Propane. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cebu Air and Suburban Propane.
Diversification Opportunities for Cebu Air and Suburban Propane
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Cebu and Suburban is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Cebu Air ADR 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 Cebu Air 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 Cebu Air ADR 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 Cebu Air i.e., Cebu Air and Suburban Propane go up and down completely randomly.
Pair Corralation between Cebu Air and Suburban Propane
Assuming the 90 days horizon Cebu Air ADR is expected to under-perform the Suburban Propane. In addition to that, Cebu Air is 1.91 times more volatile than Suburban Propane Partners. It trades about -0.02 of its total potential returns per unit of risk. Suburban Propane Partners is currently generating about 0.05 per unit of volatility. If you would invest 1,360 in Suburban Propane Partners on September 3, 2024 and sell it today you would earn a total of 601.00 from holding Suburban Propane Partners or generate 44.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Cebu Air ADR vs. Suburban Propane Partners
Performance |
| Timeline |
| Cebu Air ADR |
| Suburban Propane Partners |
Cebu Air and Suburban Propane Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cebu Air and Suburban Propane
The main advantage of trading using opposite Cebu Air and Suburban Propane positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cebu Air 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.| Cebu Air vs. Finnair Oyj | Cebu Air vs. easyJet plc | Cebu Air vs. Norse Atlantic ASA | Cebu Air vs. Air New Zealand |
| Suburban Propane vs. Northwest Natural Gas | Suburban Propane vs. NewJersey Resources | Suburban Propane vs. Atmos Energy | Suburban Propane vs. Chesapeake Utilities |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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