Correlation Between Cannae Holdings and NYSE Composite
Can any of the company-specific risk be diversified away by investing in both Cannae Holdings and NYSE Composite 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 Cannae Holdings and NYSE Composite into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cannae Holdings and NYSE Composite, you can compare the effects of market volatilities on Cannae Holdings and NYSE Composite 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 Cannae Holdings with a short position of NYSE Composite. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cannae Holdings and NYSE Composite.
Diversification Opportunities for Cannae Holdings and NYSE Composite
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cannae and NYSE is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Cannae Holdings and NYSE Composite in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NYSE Composite and Cannae Holdings 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 Cannae Holdings are associated (or correlated) with NYSE Composite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NYSE Composite has no effect on the direction of Cannae Holdings i.e., Cannae Holdings and NYSE Composite go up and down completely randomly.
Pair Corralation between Cannae Holdings and NYSE Composite
Given the investment horizon of 90 days Cannae Holdings is expected to under-perform the NYSE Composite. In addition to that, Cannae Holdings is 1.46 times more volatile than NYSE Composite. It trades about -0.39 of its total potential returns per unit of risk. NYSE Composite is currently generating about -0.19 per unit of volatility. If you would invest 1,962,768 in NYSE Composite on October 16, 2024 and sell it today you would lose (58,035) from holding NYSE Composite or give up 2.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cannae Holdings vs. NYSE Composite
Performance |
| Timeline |
Cannae Holdings and NYSE Composite Volatility Contrast
Predicted Return Density |
| Returns |
Cannae Holdings
Pair trading matchups for Cannae Holdings
NYSE Composite
Pair trading matchups for NYSE Composite
Pair Trading with Cannae Holdings and NYSE Composite
The main advantage of trading using opposite Cannae Holdings and NYSE Composite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cannae Holdings position performs unexpectedly, NYSE Composite 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 NYSE Composite will offset losses from the drop in NYSE Composite's long position.| Cannae Holdings vs. Adtalem Global Education | Cannae Holdings vs. Hamilton Lane | Cannae Holdings vs. ConnectOne Bancorp |
| NYSE Composite vs. Biglari Holdings | NYSE Composite vs. Cheche Group Class | NYSE Composite vs. Cannae Holdings | NYSE Composite vs. Bowhead Specialty Holdings |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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