Correlation Between South Jersey and Ecolab
Can any of the company-specific risk be diversified away by investing in both South Jersey and Ecolab 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 Ecolab 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 Ecolab Inc, you can compare the effects of market volatilities on South Jersey and Ecolab 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 Ecolab. Check out your portfolio center. Please also check ongoing floating volatility patterns of South Jersey and Ecolab.
Diversification Opportunities for South Jersey and Ecolab
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between South and Ecolab is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding South Jersey Industries and Ecolab Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ecolab Inc 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 Ecolab. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ecolab Inc has no effect on the direction of South Jersey i.e., South Jersey and Ecolab go up and down completely randomly.
Pair Corralation between South Jersey and Ecolab
If you would invest 3,609 in South Jersey Industries on September 12, 2024 and sell it today you would earn a total of 0.00 from holding South Jersey Industries or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
South Jersey Industries vs. Ecolab Inc
Performance |
| Timeline |
| South Jersey Industries |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Ecolab Inc |
South Jersey and Ecolab Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with South Jersey and Ecolab
The main advantage of trading using opposite South Jersey and Ecolab positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if South Jersey position performs unexpectedly, Ecolab 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 Ecolab will offset losses from the drop in Ecolab's long position.| South Jersey vs. Ecolab Inc | South Jersey vs. Luxfer Holdings PLC | South Jersey vs. Emerson Radio | South Jersey vs. Stepan Company |
| Ecolab vs. Linde plc Ordinary | Ecolab vs. PPG Industries | Ecolab vs. Sherwin Williams Co | Ecolab vs. LyondellBasell Industries NV |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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