Correlation Between Pacific Gas and Southern
Can any of the company-specific risk be diversified away by investing in both Pacific Gas and Southern 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 Pacific Gas and Southern into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pacific Gas and and Southern Co, you can compare the effects of market volatilities on Pacific Gas 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 Pacific Gas with a short position of Southern. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pacific Gas and Southern.
Diversification Opportunities for Pacific Gas and Southern
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Pacific and Southern is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Pacific Gas and and Southern Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southern and Pacific Gas 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 Pacific Gas and 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 has no effect on the direction of Pacific Gas i.e., Pacific Gas and Southern go up and down completely randomly.
Pair Corralation between Pacific Gas and Southern
Assuming the 90 days trading horizon Pacific Gas and is expected to under-perform the Southern. In addition to that, Pacific Gas is 1.89 times more volatile than Southern Co. It trades about -0.04 of its total potential returns per unit of risk. Southern Co is currently generating about -0.05 per unit of volatility. If you would invest 2,255 in Southern Co on November 18, 2024 and sell it today you would lose (22.00) from holding Southern Co or give up 0.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 52.38% |
| Values | Daily Returns |
Pacific Gas and vs. Southern Co
Performance |
| Timeline |
| Pacific Gas |
| Southern |
Pacific Gas and Southern Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pacific Gas and Southern
The main advantage of trading using opposite Pacific Gas and Southern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pacific Gas 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.| Pacific Gas vs. Pacific Gas and | Pacific Gas vs. Pacific Gas and | Pacific Gas vs. Pacific Gas and | Pacific Gas vs. Pacific Gas and |
| Southern vs. Penn National Gaming | Southern vs. Take Two Interactive Software | Southern vs. Uranium Energy Corp | Southern vs. Hochschild Mining PLC |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |