Correlation Between Suburban Propane and Eastern
Can any of the company-specific risk be diversified away by investing in both Suburban Propane and Eastern 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 Eastern 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 Eastern Co, you can compare the effects of market volatilities on Suburban Propane and Eastern 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 Eastern. Check out your portfolio center. Please also check ongoing floating volatility patterns of Suburban Propane and Eastern.
Diversification Opportunities for Suburban Propane and Eastern
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Suburban and Eastern is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Suburban Propane Partners and Eastern Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastern 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 Eastern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastern has no effect on the direction of Suburban Propane i.e., Suburban Propane and Eastern go up and down completely randomly.
Pair Corralation between Suburban Propane and Eastern
Considering the 90-day investment horizon Suburban Propane Partners is expected to generate 0.95 times more return on investment than Eastern. However, Suburban Propane Partners is 1.06 times less risky than Eastern. It trades about 0.22 of its potential returns per unit of risk. Eastern Co is currently generating about 0.02 per unit of risk. If you would invest 1,945 in Suburban Propane Partners on November 27, 2024 and sell it today you would earn a total of 181.00 from holding Suburban Propane Partners or generate 9.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Suburban Propane Partners vs. Eastern Co
Performance |
| Timeline |
| Suburban Propane Partners |
| Eastern |
Suburban Propane and Eastern Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Suburban Propane and Eastern
The main advantage of trading using opposite Suburban Propane and Eastern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Suburban Propane position performs unexpectedly, Eastern 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 Eastern will offset losses from the drop in Eastern's long position.| Suburban Propane vs. Northwest Natural Gas | Suburban Propane vs. NewJersey Resources | Suburban Propane vs. Atmos Energy | Suburban Propane vs. Chesapeake Utilities |
| Eastern vs. Timken Company | Eastern vs. Lincoln Electric Holdings | Eastern vs. Hillman Solutions Corp | Eastern vs. AB SKF |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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