Correlation Between Expand Energy and Suburban Propane
Can any of the company-specific risk be diversified away by investing in both Expand Energy 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 Expand Energy and Suburban Propane into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Expand Energy and Suburban Propane Partners, you can compare the effects of market volatilities on Expand Energy 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 Expand Energy with a short position of Suburban Propane. Check out your portfolio center. Please also check ongoing floating volatility patterns of Expand Energy and Suburban Propane.
Diversification Opportunities for Expand Energy and Suburban Propane
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Expand and Suburban is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Expand Energy 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 Expand Energy 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 Expand Energy 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 Expand Energy i.e., Expand Energy and Suburban Propane go up and down completely randomly.
Pair Corralation between Expand Energy and Suburban Propane
Assuming the 90 days horizon Expand Energy is expected to generate 1.78 times less return on investment than Suburban Propane. But when comparing it to its historical volatility, Expand Energy is 1.04 times less risky than Suburban Propane. It trades about 0.27 of its potential returns per unit of risk. Suburban Propane Partners is currently generating about 0.46 of returns per unit of risk over similar time horizon. If you would invest 1,767 in Suburban Propane Partners on November 3, 2024 and sell it today you would earn a total of 346.00 from holding Suburban Propane Partners or generate 19.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Expand Energy vs. Suburban Propane Partners
Performance |
| Timeline |
| Expand Energy |
| Suburban Propane Partners |
Expand Energy and Suburban Propane Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Expand Energy and Suburban Propane
The main advantage of trading using opposite Expand Energy and Suburban Propane positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Expand Energy 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.| Expand Energy vs. BRP Inc | Expand Energy vs. Life Time Group | Expand Energy vs. Pintec Technology Holdings | Expand Energy vs. Nasdaq Inc |
| 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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