Correlation Between Top Frontier and Suburban Propane

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

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

Diversification Opportunities for Top Frontier and Suburban Propane

0.0

Correlation Coefficient

Top Frontier  Suburban Propane

Pay attention - limited upside

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

Pair Corralation between Top Frontier and Suburban Propane

If you would invest  1,819  in Suburban Propane Partners on October 25, 2024 and sell it today you would earn a total of  91.00  from holding Suburban Propane Partners or generate 5.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Top Frontier Investment  vs.  Suburban Propane Partners

Top Frontier Investment

Risk-Adjusted Performance

0 of 100

Very Weak

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

Suburban Propane Partners

Risk-Adjusted Performance

4 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Suburban Propane Partners are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating basic indicators, Suburban Propane may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Top Frontier and Suburban Propane

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

The idea behind Top Frontier Investment and Suburban Propane Partners 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.