Correlation Between South Jersey and Northland Power
Can any of the company-specific risk be diversified away by investing in both South Jersey and Northland Power 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 Northland Power 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 Northland Power, you can compare the effects of market volatilities on South Jersey and Northland Power 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 Northland Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of South Jersey and Northland Power.
Diversification Opportunities for South Jersey and Northland Power
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between South and Northland is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding South Jersey Industries and Northland Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northland Power 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 Northland Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northland Power has no effect on the direction of South Jersey i.e., South Jersey and Northland Power go up and down completely randomly.
Pair Corralation between South Jersey and Northland Power
If you would invest 6,745 in South Jersey Industries on September 1, 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 | 4.55% |
| Values | Daily Returns |
South Jersey Industries vs. Northland Power
Performance |
| Timeline |
| South Jersey Industries |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Northland Power |
South Jersey and Northland Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with South Jersey and Northland Power
The main advantage of trading using opposite South Jersey and Northland Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if South Jersey position performs unexpectedly, Northland Power 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 Northland Power will offset losses from the drop in Northland Power's long position.| South Jersey vs. Amgen Inc | South Jersey vs. Viemed Healthcare | South Jersey vs. Cardinal Health | South Jersey vs. Microbot Medical |
| Northland Power vs. Nextera Energy | Northland Power vs. Consumers Energy | Northland Power vs. Duke Energy | Northland Power vs. Centrais Electricas Brasileiras |
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.
Other Complementary Tools
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |