Correlation Between SOCGEN and Black Hills
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By analyzing existing cross correlation between SOCGEN 425 14 APR 25 and Black Hills, you can compare the effects of market volatilities on SOCGEN and Black Hills 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 SOCGEN with a short position of Black Hills. Check out your portfolio center. Please also check ongoing floating volatility patterns of SOCGEN and Black Hills.
Diversification Opportunities for SOCGEN and Black Hills
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between SOCGEN and Black is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding SOCGEN 425 14 APR 25 and Black Hills in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Black Hills and SOCGEN 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 SOCGEN 425 14 APR 25 are associated (or correlated) with Black Hills. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Black Hills has no effect on the direction of SOCGEN i.e., SOCGEN and Black Hills go up and down completely randomly.
Pair Corralation between SOCGEN and Black Hills
Assuming the 90 days trading horizon SOCGEN 425 14 APR 25 is expected to under-perform the Black Hills. In addition to that, SOCGEN is 1.26 times more volatile than Black Hills. It trades about -0.46 of its total potential returns per unit of risk. Black Hills is currently generating about 0.41 per unit of volatility. If you would invest 5,732 in Black Hills on September 2, 2024 and sell it today you would earn a total of 675.00 from holding Black Hills or generate 11.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 23.81% |
| Values | Daily Returns |
SOCGEN 425 14 APR 25 vs. Black Hills
Performance |
| Timeline |
| SOCGEN 425 14 |
| Black Hills |
SOCGEN and Black Hills Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SOCGEN and Black Hills
The main advantage of trading using opposite SOCGEN and Black Hills positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SOCGEN position performs unexpectedly, Black Hills 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 Black Hills will offset losses from the drop in Black Hills' long position.The idea behind SOCGEN 425 14 APR 25 and Black Hills pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Black Hills vs. NorthWestern | Black Hills vs. Avista | Black Hills vs. Otter Tail | Black Hills vs. Companhia Paranaense de |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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