Correlation Between SOUTHERN and Balchem
Specify exactly 2 symbols:
By analyzing existing cross correlation between SOUTHERN CALIF EDISON and Balchem, you can compare the effects of market volatilities on SOUTHERN and Balchem 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 SOUTHERN with a short position of Balchem. Check out your portfolio center. Please also check ongoing floating volatility patterns of SOUTHERN and Balchem.
Diversification Opportunities for SOUTHERN and Balchem
Weak diversification
The 3 months correlation between SOUTHERN and Balchem is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding SOUTHERN CALIF EDISON and Balchem in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Balchem and SOUTHERN 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 SOUTHERN CALIF EDISON are associated (or correlated) with Balchem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Balchem has no effect on the direction of SOUTHERN i.e., SOUTHERN and Balchem go up and down completely randomly.
Pair Corralation between SOUTHERN and Balchem
Assuming the 90 days trading horizon SOUTHERN is expected to generate 4.56 times less return on investment than Balchem. But when comparing it to its historical volatility, SOUTHERN CALIF EDISON is 1.4 times less risky than Balchem. It trades about 0.03 of its potential returns per unit of risk. Balchem is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 11,471 in Balchem on October 25, 2024 and sell it today you would earn a total of 4,735 from holding Balchem or generate 41.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 66.23% |
| Values | Daily Returns |
SOUTHERN CALIF EDISON vs. Balchem
Performance |
| Timeline |
| SOUTHERN CALIF EDISON |
| Balchem |
SOUTHERN and Balchem Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SOUTHERN and Balchem
The main advantage of trading using opposite SOUTHERN and Balchem positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SOUTHERN position performs unexpectedly, Balchem 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 Balchem will offset losses from the drop in Balchem's long position.The idea behind SOUTHERN CALIF EDISON and Balchem 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.| Balchem vs. Sensient Technologies | Balchem vs. Innospec | Balchem vs. Minerals Technologies | Balchem vs. Oil Dri |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |