Correlation Between Suburban Propane and Kenon Holdings
Can any of the company-specific risk be diversified away by investing in both Suburban Propane and Kenon 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 Kenon 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 Kenon Holdings, you can compare the effects of market volatilities on Suburban Propane and Kenon 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 Kenon Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Suburban Propane and Kenon Holdings.
Diversification Opportunities for Suburban Propane and Kenon Holdings
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Suburban and Kenon is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Suburban Propane Partners and Kenon Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kenon 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 Kenon Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kenon Holdings has no effect on the direction of Suburban Propane i.e., Suburban Propane and Kenon Holdings go up and down completely randomly.
Pair Corralation between Suburban Propane and Kenon Holdings
Considering the 90-day investment horizon Suburban Propane Partners is expected to generate 1.3 times more return on investment than Kenon Holdings. However, Suburban Propane is 1.3 times more volatile than Kenon Holdings. It trades about 0.16 of its potential returns per unit of risk. Kenon Holdings is currently generating about 0.2 per unit of risk. If you would invest 1,814 in Suburban Propane Partners on September 4, 2024 and sell it today you would earn a total of 147.00 from holding Suburban Propane Partners or generate 8.1% 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. Kenon Holdings
Performance |
| Timeline |
| Suburban Propane Partners |
| Kenon Holdings |
Suburban Propane and Kenon Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Suburban Propane and Kenon Holdings
The main advantage of trading using opposite Suburban Propane and Kenon Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Suburban Propane position performs unexpectedly, Kenon 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 Kenon Holdings will offset losses from the drop in Kenon Holdings' long position.| Suburban Propane vs. Northwest Natural Gas | Suburban Propane vs. Atmos Energy | Suburban Propane vs. Chesapeake Utilities | Suburban Propane vs. One Gas |
| Kenon Holdings vs. Vistra Energy Corp | Kenon Holdings vs. Pampa Energia SA | Kenon Holdings vs. NRG Energy | Kenon Holdings vs. TransAlta Corp |
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 CEOs Directory module to screen CEOs from public companies around the world.
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