Correlation Between Suburban Propane and Unum
Can any of the company-specific risk be diversified away by investing in both Suburban Propane and Unum 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 Unum 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 Unum Group, you can compare the effects of market volatilities on Suburban Propane and Unum 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 Unum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Suburban Propane and Unum.
Diversification Opportunities for Suburban Propane and Unum
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Suburban and Unum is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Suburban Propane Partners and Unum Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unum Group 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 Unum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unum Group has no effect on the direction of Suburban Propane i.e., Suburban Propane and Unum go up and down completely randomly.
Pair Corralation between Suburban Propane and Unum
Considering the 90-day investment horizon Suburban Propane Partners is expected to generate 2.02 times more return on investment than Unum. However, Suburban Propane is 2.02 times more volatile than Unum Group. It trades about 0.05 of its potential returns per unit of risk. Unum Group is currently generating about 0.04 per unit of risk. If you would invest 1,312 in Suburban Propane Partners on September 12, 2024 and sell it today you would earn a total of 572.00 from holding Suburban Propane Partners or generate 43.6% 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. Unum Group
Performance |
| Timeline |
| Suburban Propane Partners |
| Unum Group |
Suburban Propane and Unum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Suburban Propane and Unum
The main advantage of trading using opposite Suburban Propane and Unum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Suburban Propane position performs unexpectedly, Unum 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 Unum will offset losses from the drop in Unum's long position.| Suburban Propane vs. Northwest Natural Gas | Suburban Propane vs. NewJersey Resources | Suburban Propane vs. Atmos Energy | Suburban Propane vs. Chesapeake Utilities |
| Unum vs. Suburban Propane Partners | Unum vs. Sun Country Airlines | Unum vs. Afya | Unum vs. Yuexiu Transport Infrastructure |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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