Correlation Between Suburban Propane and ImpediMed
Can any of the company-specific risk be diversified away by investing in both Suburban Propane and ImpediMed 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 ImpediMed 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 ImpediMed Limited, you can compare the effects of market volatilities on Suburban Propane and ImpediMed 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 ImpediMed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Suburban Propane and ImpediMed.
Diversification Opportunities for Suburban Propane and ImpediMed
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Suburban and ImpediMed is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Suburban Propane Partners and ImpediMed Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ImpediMed Limited 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 ImpediMed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ImpediMed Limited has no effect on the direction of Suburban Propane i.e., Suburban Propane and ImpediMed go up and down completely randomly.
Pair Corralation between Suburban Propane and ImpediMed
Considering the 90-day investment horizon Suburban Propane is expected to generate 71.43 times less return on investment than ImpediMed. But when comparing it to its historical volatility, Suburban Propane Partners is 8.03 times less risky than ImpediMed. It trades about 0.01 of its potential returns per unit of risk. ImpediMed Limited is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 5.00 in ImpediMed Limited on September 12, 2024 and sell it today you would lose (0.79) from holding ImpediMed Limited or give up 15.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Suburban Propane Partners vs. ImpediMed Limited
Performance |
| Timeline |
| Suburban Propane Partners |
| ImpediMed Limited |
Suburban Propane and ImpediMed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Suburban Propane and ImpediMed
The main advantage of trading using opposite Suburban Propane and ImpediMed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Suburban Propane position performs unexpectedly, ImpediMed 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 ImpediMed will offset losses from the drop in ImpediMed'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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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