Correlation Between SOUTHERN and Gap,
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By analyzing existing cross correlation between SOUTHERN CALIF EDISON and The Gap,, you can compare the effects of market volatilities on SOUTHERN and Gap, 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 Gap,. Check out your portfolio center. Please also check ongoing floating volatility patterns of SOUTHERN and Gap,.
Diversification Opportunities for SOUTHERN and Gap,
Very good diversification
The 3 months correlation between SOUTHERN and Gap, is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding SOUTHERN CALIF EDISON and The Gap, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gap, 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 Gap,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gap, has no effect on the direction of SOUTHERN i.e., SOUTHERN and Gap, go up and down completely randomly.
Pair Corralation between SOUTHERN and Gap,
Assuming the 90 days trading horizon SOUTHERN CALIF EDISON is expected to under-perform the Gap,. But the bond apears to be less risky and, when comparing its historical volatility, SOUTHERN CALIF EDISON is 3.54 times less risky than Gap,. The bond trades about -0.16 of its potential returns per unit of risk. The The Gap, is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 2,161 in The Gap, on September 3, 2024 and sell it today you would earn a total of 264.00 from holding The Gap, or generate 12.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 60.0% |
| Values | Daily Returns |
SOUTHERN CALIF EDISON vs. The Gap,
Performance |
| Timeline |
| SOUTHERN CALIF EDISON |
| Gap, |
SOUTHERN and Gap, Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SOUTHERN and Gap,
The main advantage of trading using opposite SOUTHERN and Gap, positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SOUTHERN position performs unexpectedly, Gap, 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 Gap, will offset losses from the drop in Gap,'s long position.| SOUTHERN vs. The Gap, | SOUTHERN vs. Fast Retailing Co | SOUTHERN vs. Grupo Televisa SAB | SOUTHERN vs. Iridium Communications |
| Gap, vs. Centessa Pharmaceuticals PLC | Gap, vs. Kandi Technologies Group | Gap, vs. Digi International | Gap, vs. Reservoir Media |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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