Correlation Between Inflection Point and South Jersey

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Can any of the company-specific risk be diversified away by investing in both Inflection Point 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 Inflection Point and South Jersey into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inflection Point Acquisition and South Jersey Industries, you can compare the effects of market volatilities on Inflection Point 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 Inflection Point with a short position of South Jersey. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inflection Point and South Jersey.

Diversification Opportunities for Inflection Point and South Jersey

-0.3
  Correlation Coefficient

Very good diversification

The 3 months correlation between Inflection and South is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Inflection Point Acquisition 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 Inflection Point 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 Inflection Point Acquisition 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 Inflection Point i.e., Inflection Point and South Jersey go up and down completely randomly.

Pair Corralation between Inflection Point and South Jersey

If you would invest  6,745  in South Jersey Industries on October 11, 2024 and sell it today you would earn a total of  0.00  from holding South Jersey Industries or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy4.76%
ValuesDaily Returns

Inflection Point Acquisition  vs.  South Jersey Industries

 Performance 
       Timeline  
Inflection Point Acq 

Risk-Adjusted Performance

7 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Inflection Point Acquisition are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Inflection Point unveiled solid returns over the last few months and may actually be approaching a breakup point.
South Jersey Industries 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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 newest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Inflection Point and South Jersey Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Inflection Point and South Jersey

The main advantage of trading using opposite Inflection Point and South Jersey positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inflection Point 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 Inflection Point Acquisition 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.

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