Correlation Between South Jersey and Arrow Electronics
Can any of the company-specific risk be diversified away by investing in both South Jersey and Arrow Electronics 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 South Jersey and Arrow Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between South Jersey Industries and Arrow Electronics, you can compare the effects of market volatilities on South Jersey and Arrow Electronics 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 South Jersey with a short position of Arrow Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of South Jersey and Arrow Electronics.
Diversification Opportunities for South Jersey and Arrow Electronics
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between South and Arrow is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding South Jersey Industries and Arrow Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arrow Electronics and South Jersey 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 South Jersey Industries are associated (or correlated) with Arrow Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arrow Electronics has no effect on the direction of South Jersey i.e., South Jersey and Arrow Electronics go up and down completely randomly.
Pair Corralation between South Jersey and Arrow Electronics
If you would invest 12,003 in Arrow Electronics on September 12, 2024 and sell it today you would earn a total of 17.00 from holding Arrow Electronics or generate 0.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
South Jersey Industries vs. Arrow Electronics
Performance |
| Timeline |
| South Jersey Industries |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Arrow Electronics |
South Jersey and Arrow Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with South Jersey and Arrow Electronics
The main advantage of trading using opposite South Jersey and Arrow Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if South Jersey position performs unexpectedly, Arrow Electronics 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 Arrow Electronics will offset losses from the drop in Arrow Electronics' long position.| South Jersey vs. Ecolab Inc | South Jersey vs. Luxfer Holdings PLC | South Jersey vs. Emerson Radio | South Jersey vs. Stepan Company |
| Arrow Electronics vs. Insight Enterprises | Arrow Electronics vs. Synnex | Arrow Electronics vs. Climb Global Solutions | Arrow Electronics vs. PC Connection |
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 Stocks Directory module to find actively traded stocks across global markets.
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