Correlation Between NYSE Composite and Abacus Life
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Abacus Life 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 NYSE Composite and Abacus Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Abacus Life, you can compare the effects of market volatilities on NYSE Composite and Abacus Life 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 NYSE Composite with a short position of Abacus Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Abacus Life.
Diversification Opportunities for NYSE Composite and Abacus Life
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between NYSE and Abacus is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Abacus Life in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Abacus Life and NYSE Composite 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 NYSE Composite are associated (or correlated) with Abacus Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Abacus Life has no effect on the direction of NYSE Composite i.e., NYSE Composite and Abacus Life go up and down completely randomly.
Pair Corralation between NYSE Composite and Abacus Life
Assuming the 90 days trading horizon NYSE Composite is expected to generate 4.89 times less return on investment than Abacus Life. But when comparing it to its historical volatility, NYSE Composite is 11.39 times less risky than Abacus Life. It trades about 0.12 of its potential returns per unit of risk. Abacus Life is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 90.00 in Abacus Life on August 29, 2024 and sell it today you would earn a total of 25.00 from holding Abacus Life or generate 27.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.04% |
| Values | Daily Returns |
NYSE Composite vs. Abacus Life
Performance |
| Timeline |
NYSE Composite and Abacus Life Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Abacus Life
Pair trading matchups for Abacus Life
Pair Trading with NYSE Composite and Abacus Life
The main advantage of trading using opposite NYSE Composite and Abacus Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Abacus Life 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 Abacus Life will offset losses from the drop in Abacus Life's long position.| NYSE Composite vs. Sphere Entertainment Co | NYSE Composite vs. Weibo Corp | NYSE Composite vs. BCE Inc | NYSE Composite vs. Pinterest |
| Abacus Life vs. Northstar Clean Technologies | Abacus Life vs. Integral Ad Science | Abacus Life vs. BCE Inc | Abacus Life vs. Ultra Clean 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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