Correlation Between York Water and SJW Group
Can any of the company-specific risk be diversified away by investing in both York Water and SJW Group 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 York Water and SJW Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The York Water and SJW Group Common, you can compare the effects of market volatilities on York Water and SJW Group 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 York Water with a short position of SJW Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of York Water and SJW Group.
Diversification Opportunities for York Water and SJW Group
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between York and SJW is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding The York Water and SJW Group Common in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SJW Group Common and York Water 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 The York Water are associated (or correlated) with SJW Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SJW Group Common has no effect on the direction of York Water i.e., York Water and SJW Group go up and down completely randomly.
Pair Corralation between York Water and SJW Group
Given the investment horizon of 90 days The York Water is expected to generate 1.16 times more return on investment than SJW Group. However, York Water is 1.16 times more volatile than SJW Group Common. It trades about 0.02 of its potential returns per unit of risk. SJW Group Common is currently generating about -0.05 per unit of risk. If you would invest 3,586 in The York Water on August 28, 2024 and sell it today you would earn a total of 21.00 from holding The York Water or generate 0.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
The York Water vs. SJW Group Common
Performance |
| Timeline |
| York Water |
| SJW Group Common |
York Water and SJW Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with York Water and SJW Group
The main advantage of trading using opposite York Water and SJW Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if York Water position performs unexpectedly, SJW Group 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 SJW Group will offset losses from the drop in SJW Group's long position.| York Water vs. California Water Service | York Water vs. SJW Group Common | York Water vs. Artesian Resources | York Water vs. American States Water |
| SJW Group vs. California Water Service | SJW Group vs. Artesian Resources | SJW Group vs. The York Water | SJW Group 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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