Correlation Between South Jersey and AltaGas
Can any of the company-specific risk be diversified away by investing in both South Jersey and AltaGas 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 AltaGas 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 AltaGas, you can compare the effects of market volatilities on South Jersey and AltaGas 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 AltaGas. Check out your portfolio center. Please also check ongoing floating volatility patterns of South Jersey and AltaGas.
Diversification Opportunities for South Jersey and AltaGas
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between South and AltaGas is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding South Jersey Industries and AltaGas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AltaGas 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 AltaGas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AltaGas has no effect on the direction of South Jersey i.e., South Jersey and AltaGas go up and down completely randomly.
Pair Corralation between South Jersey and AltaGas
If you would invest 2,198 in AltaGas on August 24, 2024 and sell it today you would earn a total of 321.00 from holding AltaGas or generate 14.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 0.8% |
| Values | Daily Returns |
South Jersey Industries vs. AltaGas
Performance |
| Timeline |
| South Jersey Industries |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| AltaGas |
South Jersey and AltaGas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with South Jersey and AltaGas
The main advantage of trading using opposite South Jersey and AltaGas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if South Jersey position performs unexpectedly, AltaGas 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 AltaGas will offset losses from the drop in AltaGas' long position.| South Jersey vs. Paysafe | South Jersey vs. ServiceNow | South Jersey vs. Q2 Holdings | South Jersey vs. Iridium Communications |
| AltaGas vs. Southern Company Series | AltaGas vs. Southern Co | AltaGas vs. Talen Energy | AltaGas vs. CMS Energy Corp |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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