Correlation Between Suburban Propane and Centuri Holdings,
Can any of the company-specific risk be diversified away by investing in both Suburban Propane and Centuri Holdings, 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 Centuri Holdings, 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 Centuri Holdings,, you can compare the effects of market volatilities on Suburban Propane and Centuri Holdings, 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 Centuri Holdings,. Check out your portfolio center. Please also check ongoing floating volatility patterns of Suburban Propane and Centuri Holdings,.
Diversification Opportunities for Suburban Propane and Centuri Holdings,
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Suburban and Centuri is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Suburban Propane Partners and Centuri Holdings, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centuri Holdings, 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 Centuri Holdings,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centuri Holdings, has no effect on the direction of Suburban Propane i.e., Suburban Propane and Centuri Holdings, go up and down completely randomly.
Pair Corralation between Suburban Propane and Centuri Holdings,
Considering the 90-day investment horizon Suburban Propane is expected to generate 4.77 times less return on investment than Centuri Holdings,. But when comparing it to its historical volatility, Suburban Propane Partners is 1.58 times less risky than Centuri Holdings,. It trades about 0.06 of its potential returns per unit of risk. Centuri Holdings, is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 1,838 in Centuri Holdings, on August 27, 2024 and sell it today you would earn a total of 241.00 from holding Centuri Holdings, or generate 13.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Suburban Propane Partners vs. Centuri Holdings,
Performance |
| Timeline |
| Suburban Propane Partners |
| Centuri Holdings, |
Suburban Propane and Centuri Holdings, Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Suburban Propane and Centuri Holdings,
The main advantage of trading using opposite Suburban Propane and Centuri Holdings, positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Suburban Propane position performs unexpectedly, Centuri Holdings, 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 Centuri Holdings, will offset losses from the drop in Centuri Holdings,'s long position.| Suburban Propane vs. Northwest Natural Gas | Suburban Propane vs. NewJersey Resources | Suburban Propane vs. Atmos Energy | Suburban Propane vs. Chesapeake Utilities |
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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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