Correlation Between United Utilities and Artesian Resources
Can any of the company-specific risk be diversified away by investing in both United Utilities and Artesian Resources 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 United Utilities and Artesian Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Utilities Group and Artesian Resources, you can compare the effects of market volatilities on United Utilities and Artesian Resources 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 United Utilities with a short position of Artesian Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Utilities and Artesian Resources.
Diversification Opportunities for United Utilities and Artesian Resources
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between United and Artesian is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding United Utilities Group and Artesian Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Artesian Resources and United Utilities 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 United Utilities Group are associated (or correlated) with Artesian Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Artesian Resources has no effect on the direction of United Utilities i.e., United Utilities and Artesian Resources go up and down completely randomly.
Pair Corralation between United Utilities and Artesian Resources
If you would invest 1,394 in United Utilities Group on November 9, 2024 and sell it today you would earn a total of 0.00 from holding United Utilities Group or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.56% |
| Values | Daily Returns |
United Utilities Group vs. Artesian Resources
Performance |
| Timeline |
| United Utilities |
| Artesian Resources |
United Utilities and Artesian Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Utilities and Artesian Resources
The main advantage of trading using opposite United Utilities and Artesian Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Utilities position performs unexpectedly, Artesian Resources 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 Artesian Resources will offset losses from the drop in Artesian Resources' long position.| United Utilities vs. Artesian Resources | United Utilities vs. Global Water Resources | United Utilities vs. Essential Utilities | United Utilities vs. American Water Works |
| Artesian Resources vs. California Water Service | Artesian Resources vs. SJW Group Common | Artesian Resources vs. The York Water | Artesian Resources vs. American States Water |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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