Correlation Between BigBearai Holdings and South Jersey

Can any of the company-specific risk be diversified away by investing in both BigBearai Holdings and South Jersey 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 BigBearai Holdings and South Jersey into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BigBearai Holdings and South Jersey Industries, you can compare the effects of market volatilities on BigBearai Holdings and South Jersey 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 BigBearai Holdings with a short position of South Jersey. Check out your portfolio center. Please also check ongoing floating volatility patterns of BigBearai Holdings and South Jersey.

Diversification Opportunities for BigBearai Holdings and South Jersey

-0.73

Correlation Coefficient

BigBearai Holdings  South Jersey

Pay attention - limited upside

The 3 months correlation between BigBearai and South is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding BigBearai Holdings and South Jersey Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on South Jersey Industries and BigBearai Holdings 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 BigBearai Holdings are associated (or correlated) with South Jersey. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of South Jersey Industries has no effect on the direction of BigBearai Holdings i.e., BigBearai Holdings and South Jersey go up and down completely randomly.

Pair Corralation between BigBearai Holdings and South Jersey

Given the investment horizon of 90 days BigBearai Holdings is expected to generate 43.02 times more return on investment than South Jersey. However, BigBearai Holdings is 43.02 times more volatile than South Jersey Industries. It trades about 0.06 of its potential returns per unit of risk. South Jersey Industries is currently generating about -0.14 per unit of risk. If you would invest  65.00  in BigBearai Holdings on September 18, 2024 and sell it today you would earn a total of  187.00  from holding BigBearai Holdings or generate 287.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	9.09%
Values	Daily Returns

BigBearai Holdings  vs.  South Jersey Industries

BigBearai Holdings

Risk-Adjusted Performance

10 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in BigBearai Holdings are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady basic indicators, BigBearai Holdings demonstrated solid returns over the last few months and may actually be approaching a breakup point.

South Jersey Industries

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days South Jersey Industries has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable forward indicators, South Jersey is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with BigBearai Holdings and South Jersey

The main advantage of trading using opposite BigBearai Holdings and South Jersey positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BigBearai Holdings position performs unexpectedly, South Jersey 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 South Jersey will offset losses from the drop in South Jersey's long position.

The idea behind BigBearai Holdings and South Jersey Industries pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..