Correlation Between South Jersey and Innergex Renewable
Can any of the company-specific risk be diversified away by investing in both South Jersey and Innergex Renewable 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 Innergex Renewable 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 Innergex Renewable Energy, you can compare the effects of market volatilities on South Jersey and Innergex Renewable 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 Innergex Renewable. Check out your portfolio center. Please also check ongoing floating volatility patterns of South Jersey and Innergex Renewable.
Diversification Opportunities for South Jersey and Innergex Renewable
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between South and Innergex is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding South Jersey Industries and Innergex Renewable Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innergex Renewable Energy 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 Innergex Renewable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innergex Renewable Energy has no effect on the direction of South Jersey i.e., South Jersey and Innergex Renewable go up and down completely randomly.
Pair Corralation between South Jersey and Innergex Renewable
If you would invest 6,745 in South Jersey Industries on August 28, 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 Together |
| Strength | Significant |
| Accuracy | 4.76% |
| Values | Daily Returns |
South Jersey Industries vs. Innergex Renewable Energy
Performance |
| Timeline |
| South Jersey Industries |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Innergex Renewable Energy |
South Jersey and Innergex Renewable Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with South Jersey and Innergex Renewable
The main advantage of trading using opposite South Jersey and Innergex Renewable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if South Jersey position performs unexpectedly, Innergex Renewable 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 Innergex Renewable will offset losses from the drop in Innergex Renewable's long position.| South Jersey vs. Teleflex Incorporated | South Jersey vs. Highway Holdings Limited | South Jersey vs. Papaya Growth Opportunity | South Jersey vs. Griffon |
| Innergex Renewable vs. TransAlta Corp | Innergex Renewable vs. Pampa Energia SA | Innergex Renewable vs. Vistra Energy Corp | Innergex Renewable vs. NRG Energy |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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