Correlation Between SOUTHERN and Constellation Brands
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By analyzing existing cross correlation between SOUTHERN CALIF EDISON and Constellation Brands Class, you can compare the effects of market volatilities on SOUTHERN and Constellation Brands 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 Constellation Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of SOUTHERN and Constellation Brands.
Diversification Opportunities for SOUTHERN and Constellation Brands
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SOUTHERN and Constellation is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding SOUTHERN CALIF EDISON and Constellation Brands Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Constellation Brands 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 Constellation Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Constellation Brands has no effect on the direction of SOUTHERN i.e., SOUTHERN and Constellation Brands go up and down completely randomly.
Pair Corralation between SOUTHERN and Constellation Brands
Assuming the 90 days trading horizon SOUTHERN CALIF EDISON is expected to generate 1.01 times more return on investment than Constellation Brands. However, SOUTHERN is 1.01 times more volatile than Constellation Brands Class. It trades about 0.02 of its potential returns per unit of risk. Constellation Brands Class is currently generating about -0.01 per unit of risk. If you would invest 9,927 in SOUTHERN CALIF EDISON on September 12, 2024 and sell it today you would earn a total of 339.00 from holding SOUTHERN CALIF EDISON or generate 3.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 72.51% |
| Values | Daily Returns |
SOUTHERN CALIF EDISON vs. Constellation Brands Class
Performance |
| Timeline |
| SOUTHERN CALIF EDISON |
| Constellation Brands |
SOUTHERN and Constellation Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SOUTHERN and Constellation Brands
The main advantage of trading using opposite SOUTHERN and Constellation Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SOUTHERN position performs unexpectedly, Constellation Brands 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 Constellation Brands will offset losses from the drop in Constellation Brands' long position.| SOUTHERN vs. Constellation Brands Class | SOUTHERN vs. Paiute Oil Mining | SOUTHERN vs. Monster Beverage Corp | SOUTHERN vs. Perseus Mining Limited |
| Constellation Brands vs. Brown Forman | Constellation Brands vs. Duckhorn Portfolio | Constellation Brands vs. MGP Ingredients | Constellation Brands vs. Brown Forman |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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