Correlation Between SJW Group and York Water

Can any of the company-specific risk be diversified away by investing in both SJW Group and York Water 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 SJW Group and York Water into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SJW Group Common and The York Water, you can compare the effects of market volatilities on SJW Group and York Water 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 SJW Group with a short position of York Water. Check out your portfolio center. Please also check ongoing floating volatility patterns of SJW Group and York Water.

Diversification Opportunities for SJW Group and York Water

0.82

Correlation Coefficient

SJW Group  York Water

Very poor diversification

The 3 months correlation between SJW and York is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding SJW Group Common and The York Water in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on York Water and SJW Group 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 SJW Group Common are associated (or correlated) with York Water. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of York Water has no effect on the direction of SJW Group i.e., SJW Group and York Water go up and down completely randomly.

Pair Corralation between SJW Group and York Water

Considering the 90-day investment horizon SJW Group Common is expected to generate 1.18 times more return on investment than York Water. However, SJW Group is 1.18 times more volatile than The York Water. It trades about 0.07 of its potential returns per unit of risk. The York Water is currently generating about 0.05 per unit of risk. If you would invest  4,897  in SJW Group Common on December 27, 2024 and sell it today you would earn a total of  331.00  from holding SJW Group Common or generate 6.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

SJW Group Common  vs.  The York Water

SJW Group Common

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in SJW Group Common are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain forward-looking indicators, SJW Group may actually be approaching a critical reversion point that can send shares even higher in April 2025.

York Water

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in The York Water are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, York Water is not utilizing all of its potentials. The newest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with SJW Group and York Water

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

The idea behind SJW Group Common and The York Water 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.