Correlation Between South Jersey and Western Digital
Can any of the company-specific risk be diversified away by investing in both South Jersey and Western Digital 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 Western Digital 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 Western Digital, you can compare the effects of market volatilities on South Jersey and Western Digital 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 Western Digital. Check out your portfolio center. Please also check ongoing floating volatility patterns of South Jersey and Western Digital.
Diversification Opportunities for South Jersey and Western Digital
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between South and Western is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding South Jersey Industries and Western Digital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Digital 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 Western Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Digital has no effect on the direction of South Jersey i.e., South Jersey and Western Digital go up and down completely randomly.
Pair Corralation between South Jersey and Western Digital
If you would invest 6,745 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 | Insignificant |
| Accuracy | 0.8% |
| Values | Daily Returns |
South Jersey Industries vs. Western Digital
Performance |
| Timeline |
| South Jersey Industries |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Western Digital |
South Jersey and Western Digital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with South Jersey and Western Digital
The main advantage of trading using opposite South Jersey and Western Digital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if South Jersey position performs unexpectedly, Western Digital 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 Western Digital will offset losses from the drop in Western Digital's long position.| South Jersey vs. Chipotle Mexican Grill | South Jersey vs. Ark Restaurants Corp | South Jersey vs. Dominos Pizza | South Jersey vs. Palomar Holdings |
| Western Digital vs. NetApp Inc | Western Digital vs. Logitech International SA | Western Digital vs. HP Inc | Western Digital vs. Dell Technologies |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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