Correlation Between United States and SOUTHERN
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By analyzing existing cross correlation between United States Steel and SOUTHERN CALIF EDISON, you can compare the effects of market volatilities on United States and SOUTHERN 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 States with a short position of SOUTHERN. Check out your portfolio center. Please also check ongoing floating volatility patterns of United States and SOUTHERN.
Diversification Opportunities for United States and SOUTHERN
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between United and SOUTHERN is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding United States Steel and SOUTHERN CALIF EDISON in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SOUTHERN CALIF EDISON and United States 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 States Steel are associated (or correlated) with SOUTHERN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SOUTHERN CALIF EDISON has no effect on the direction of United States i.e., United States and SOUTHERN go up and down completely randomly.
Pair Corralation between United States and SOUTHERN
Taking into account the 90-day investment horizon United States Steel is expected to generate 3.54 times more return on investment than SOUTHERN. However, United States is 3.54 times more volatile than SOUTHERN CALIF EDISON. It trades about 0.02 of its potential returns per unit of risk. SOUTHERN CALIF EDISON is currently generating about 0.02 per unit of risk. If you would invest 3,173 in United States Steel on September 12, 2024 and sell it today you would earn a total of 265.50 from holding United States Steel or generate 8.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.19% |
| Values | Daily Returns |
United States Steel vs. SOUTHERN CALIF EDISON
Performance |
| Timeline |
| United States Steel |
| SOUTHERN CALIF EDISON |
United States and SOUTHERN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United States and SOUTHERN
The main advantage of trading using opposite United States and SOUTHERN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United States position performs unexpectedly, SOUTHERN 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 SOUTHERN will offset losses from the drop in SOUTHERN's long position.| United States vs. Nucor Corp | United States vs. Steel Dynamics | United States vs. ArcelorMittal SA ADR | United States vs. Gerdau SA ADR |
| SOUTHERN vs. United States Steel | SOUTHERN vs. Kaltura | SOUTHERN vs. Infosys Ltd ADR | SOUTHERN vs. Sapiens International |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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