Correlation Between Suburban Propane and Shenzhen Investment

Can any of the company-specific risk be diversified away by investing in both Suburban Propane and Shenzhen Investment 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 Suburban Propane and Shenzhen Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Suburban Propane Partners and Shenzhen Investment Holdings, you can compare the effects of market volatilities on Suburban Propane and Shenzhen Investment 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 Suburban Propane with a short position of Shenzhen Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Suburban Propane and Shenzhen Investment.

Diversification Opportunities for Suburban Propane and Shenzhen Investment

0.0

Correlation Coefficient

Suburban Propane  Shenzhen Investment

Pay attention - limited upside

The 3 months correlation between Suburban and Shenzhen is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Suburban Propane Partners and Shenzhen Investment Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Investment and Suburban Propane 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 Suburban Propane Partners are associated (or correlated) with Shenzhen Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Investment has no effect on the direction of Suburban Propane i.e., Suburban Propane and Shenzhen Investment go up and down completely randomly.

Pair Corralation between Suburban Propane and Shenzhen Investment

If you would invest  1,702  in Suburban Propane Partners on December 21, 2024 and sell it today you would earn a total of  402.00  from holding Suburban Propane Partners or generate 23.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

Suburban Propane Partners  vs.  Shenzhen Investment Holdings

Suburban Propane Partners

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Suburban Propane Partners are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating basic indicators, Suburban Propane demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Shenzhen Investment

Risk-Adjusted Performance

Very Weak

Over the last 90 days Shenzhen Investment Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical indicators, Shenzhen Investment is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Suburban Propane and Shenzhen Investment

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

The idea behind Suburban Propane Partners and Shenzhen Investment Holdings 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.

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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.