Correlation Between NYSE Composite and Salient Adaptive
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Salient Adaptive 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 Salient Adaptive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Salient Adaptive Equity, you can compare the effects of market volatilities on NYSE Composite and Salient Adaptive 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 Salient Adaptive. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Salient Adaptive.
Diversification Opportunities for NYSE Composite and Salient Adaptive
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between NYSE and Salient is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Salient Adaptive Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Salient Adaptive Equity 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 Salient Adaptive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Salient Adaptive Equity has no effect on the direction of NYSE Composite i.e., NYSE Composite and Salient Adaptive go up and down completely randomly.
Pair Corralation between NYSE Composite and Salient Adaptive
Assuming the 90 days trading horizon NYSE Composite is expected to generate 2.82 times more return on investment than Salient Adaptive. However, NYSE Composite is 2.82 times more volatile than Salient Adaptive Equity. It trades about 0.08 of its potential returns per unit of risk. Salient Adaptive Equity is currently generating about 0.21 per unit of risk. If you would invest 1,518,845 in NYSE Composite on September 13, 2024 and sell it today you would earn a total of 470,258 from holding NYSE Composite or generate 30.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.39% |
| Values | Daily Returns |
NYSE Composite vs. Salient Adaptive Equity
Performance |
| Timeline |
NYSE Composite and Salient Adaptive Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Salient Adaptive Equity
Pair trading matchups for Salient Adaptive
Pair Trading with NYSE Composite and Salient Adaptive
The main advantage of trading using opposite NYSE Composite and Salient Adaptive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Salient Adaptive 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 Salient Adaptive will offset losses from the drop in Salient Adaptive's long position.| NYSE Composite vs. Boston Beer | NYSE Composite vs. Freedom Bank of | NYSE Composite vs. KeyCorp | NYSE Composite vs. LithiumBank Resources Corp |
| Salient Adaptive vs. Allianzgi Diversified Income | Salient Adaptive vs. Lord Abbett Diversified | Salient Adaptive vs. Guggenheim Diversified Income | Salient Adaptive vs. Federated Hermes Conservative |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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