Correlation Between NewJersey Resources and Plains All

Can any of the company-specific risk be diversified away by investing in both NewJersey Resources and Plains All 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 NewJersey Resources and Plains All into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between NewJersey Resources and Plains All American, you can compare the effects of market volatilities on NewJersey Resources and Plains All 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 NewJersey Resources with a short position of Plains All. Check out your portfolio center. Please also check ongoing floating volatility patterns of NewJersey Resources and Plains All.

Diversification Opportunities for NewJersey Resources and Plains All

0.0

Correlation Coefficient

NewJersey Resources  Plains All

Pay attention - limited upside

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

Pair Corralation between NewJersey Resources and Plains All

Considering the 90-day investment horizon NewJersey Resources is expected to under-perform the Plains All. But the stock apears to be less risky and, when comparing its historical volatility, NewJersey Resources is 1.33 times less risky than Plains All. The stock trades about -0.07 of its potential returns per unit of risk. The Plains All American is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  1,637  in Plains All American on May 7, 2025 and sell it today you would earn a total of  156.00  from holding Plains All American or generate 9.53% return on investment over 90 days.

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

NewJersey Resources  vs.  Plains All American

NewJersey Resources

Risk-Adjusted Performance

Weakest

Over the last 90 days NewJersey Resources has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable forward-looking indicators, NewJersey Resources is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Plains All American

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Plains All American are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady basic indicators, Plains All may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with NewJersey Resources and Plains All

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

The idea behind NewJersey Resources and Plains All American 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.