Correlation Between Palomar Holdings and South Jersey
Can any of the company-specific risk be diversified away by investing in both Palomar Holdings and South Jersey 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 Palomar Holdings and South Jersey into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Palomar Holdings and South Jersey Industries, you can compare the effects of market volatilities on Palomar Holdings and South Jersey 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 Palomar Holdings with a short position of South Jersey. Check out your portfolio center. Please also check ongoing floating volatility patterns of Palomar Holdings and South Jersey.
Diversification Opportunities for Palomar Holdings and South Jersey
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Palomar and South is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Palomar Holdings and South Jersey Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on South Jersey Industries and Palomar Holdings 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 Palomar Holdings are associated (or correlated) with South Jersey. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of South Jersey Industries has no effect on the direction of Palomar Holdings i.e., Palomar Holdings and South Jersey go up and down completely randomly.
Pair Corralation between Palomar Holdings and South Jersey
If you would invest 10,069 in Palomar Holdings on September 13, 2024 and sell it today you would earn a total of 827.00 from holding Palomar Holdings or generate 8.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
Palomar Holdings vs. South Jersey Industries
Performance |
| Timeline |
| Palomar Holdings |
| South Jersey Industries |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Palomar Holdings and South Jersey Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Palomar Holdings and South Jersey
The main advantage of trading using opposite Palomar Holdings and South Jersey positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Palomar Holdings position performs unexpectedly, South Jersey 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 South Jersey will offset losses from the drop in South Jersey's long position.| Palomar Holdings vs. Chubb | Palomar Holdings vs. W R Berkley | Palomar Holdings vs. The Allstate | Palomar Holdings vs. Markel |
| South Jersey vs. Pekin Life Insurance | South Jersey vs. Montauk Renewables | South Jersey vs. ICC Holdings | South Jersey vs. Acumen Pharmaceuticals |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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