Correlation Between Suburban Propane and Cebu Air
Can any of the company-specific risk be diversified away by investing in both Suburban Propane and Cebu Air 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 Suburban Propane and Cebu Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Suburban Propane Partners and Cebu Air ADR, you can compare the effects of market volatilities on Suburban Propane and Cebu Air 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 Suburban Propane with a short position of Cebu Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Suburban Propane and Cebu Air.
Diversification Opportunities for Suburban Propane and Cebu Air
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Suburban and Cebu is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Suburban Propane Partners and Cebu Air ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cebu Air ADR and Suburban Propane 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 Suburban Propane Partners are associated (or correlated) with Cebu Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cebu Air ADR has no effect on the direction of Suburban Propane i.e., Suburban Propane and Cebu Air go up and down completely randomly.
Pair Corralation between Suburban Propane and Cebu Air
Considering the 90-day investment horizon Suburban Propane Partners is expected to under-perform the Cebu Air. But the stock apears to be less risky and, when comparing its historical volatility, Suburban Propane Partners is 2.31 times less risky than Cebu Air. The stock trades about 0.0 of its potential returns per unit of risk. The Cebu Air ADR is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 150.00 in Cebu Air ADR on September 3, 2024 and sell it today you would earn a total of 35.00 from holding Cebu Air ADR or generate 23.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Suburban Propane Partners vs. Cebu Air ADR
Performance |
| Timeline |
| Suburban Propane Partners |
| Cebu Air ADR |
Suburban Propane and Cebu Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Suburban Propane and Cebu Air
The main advantage of trading using opposite Suburban Propane and Cebu Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Suburban Propane position performs unexpectedly, Cebu Air 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 Cebu Air will offset losses from the drop in Cebu Air's long position.| Suburban Propane vs. Northwest Natural Gas | Suburban Propane vs. NewJersey Resources | Suburban Propane vs. Atmos Energy | Suburban Propane vs. Chesapeake Utilities |
| Cebu Air vs. Finnair Oyj | Cebu Air vs. easyJet plc | Cebu Air vs. Norse Atlantic ASA | Cebu Air vs. Air New Zealand |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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