Correlation Between Suburban Propane and Mapletree Logistics
Can any of the company-specific risk be diversified away by investing in both Suburban Propane and Mapletree Logistics 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 Mapletree Logistics 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 Mapletree Logistics Trust, you can compare the effects of market volatilities on Suburban Propane and Mapletree Logistics 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 Mapletree Logistics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Suburban Propane and Mapletree Logistics.
Diversification Opportunities for Suburban Propane and Mapletree Logistics
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Suburban and Mapletree is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Suburban Propane Partners and Mapletree Logistics Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mapletree Logistics Trust 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 Mapletree Logistics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mapletree Logistics Trust has no effect on the direction of Suburban Propane i.e., Suburban Propane and Mapletree Logistics go up and down completely randomly.
Pair Corralation between Suburban Propane and Mapletree Logistics
Considering the 90-day investment horizon Suburban Propane Partners is expected to generate 0.88 times more return on investment than Mapletree Logistics. However, Suburban Propane Partners is 1.14 times less risky than Mapletree Logistics. It trades about 0.15 of its potential returns per unit of risk. Mapletree Logistics Trust is currently generating about -0.16 per unit of risk. If you would invest 1,844 in Suburban Propane Partners on September 1, 2024 and sell it today you would earn a total of 141.00 from holding Suburban Propane Partners or generate 7.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Suburban Propane Partners vs. Mapletree Logistics Trust
Performance |
| Timeline |
| Suburban Propane Partners |
| Mapletree Logistics Trust |
Suburban Propane and Mapletree Logistics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Suburban Propane and Mapletree Logistics
The main advantage of trading using opposite Suburban Propane and Mapletree Logistics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Suburban Propane position performs unexpectedly, Mapletree Logistics 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 Mapletree Logistics will offset losses from the drop in Mapletree Logistics' long position.| Suburban Propane vs. Northwest Natural Gas | Suburban Propane vs. Atmos Energy | Suburban Propane vs. One Gas | Suburban Propane vs. NiSource |
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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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