Correlation Between ReposiTrak and Southwest Gas
Can any of the company-specific risk be diversified away by investing in both ReposiTrak and Southwest Gas 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 ReposiTrak and Southwest Gas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ReposiTrak and Southwest Gas Holdings, you can compare the effects of market volatilities on ReposiTrak and Southwest Gas 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 ReposiTrak with a short position of Southwest Gas. Check out your portfolio center. Please also check ongoing floating volatility patterns of ReposiTrak and Southwest Gas.
Diversification Opportunities for ReposiTrak and Southwest Gas
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ReposiTrak and Southwest is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding ReposiTrak and Southwest Gas Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southwest Gas Holdings and ReposiTrak 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 ReposiTrak are associated (or correlated) with Southwest Gas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southwest Gas Holdings has no effect on the direction of ReposiTrak i.e., ReposiTrak and Southwest Gas go up and down completely randomly.
Pair Corralation between ReposiTrak and Southwest Gas
Given the investment horizon of 90 days ReposiTrak is expected to generate 1.64 times more return on investment than Southwest Gas. However, ReposiTrak is 1.64 times more volatile than Southwest Gas Holdings. It trades about 0.25 of its potential returns per unit of risk. Southwest Gas Holdings is currently generating about 0.04 per unit of risk. If you would invest 1,923 in ReposiTrak on September 13, 2024 and sell it today you would earn a total of 482.00 from holding ReposiTrak or generate 25.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ReposiTrak vs. Southwest Gas Holdings
Performance |
| Timeline |
| ReposiTrak |
| Southwest Gas Holdings |
ReposiTrak and Southwest Gas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ReposiTrak and Southwest Gas
The main advantage of trading using opposite ReposiTrak and Southwest Gas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ReposiTrak position performs unexpectedly, Southwest Gas 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 Southwest Gas will offset losses from the drop in Southwest Gas' long position.| ReposiTrak vs. ON Semiconductor | ReposiTrak vs. Fomento Economico Mexicano | ReposiTrak vs. Uranium Energy Corp | ReposiTrak vs. Tower Semiconductor |
| Southwest Gas vs. One Gas | Southwest Gas vs. NiSource | Southwest Gas vs. Aquagold International | Southwest Gas vs. Thrivent High Yield |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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