Correlation Between NYSE Composite and Acadian Emerging
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Acadian Emerging 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 Acadian Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Acadian Emerging Markets, you can compare the effects of market volatilities on NYSE Composite and Acadian Emerging 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 Acadian Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Acadian Emerging.
Diversification Opportunities for NYSE Composite and Acadian Emerging
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NYSE and Acadian is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Acadian Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acadian Emerging Markets 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 Acadian Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acadian Emerging Markets has no effect on the direction of NYSE Composite i.e., NYSE Composite and Acadian Emerging go up and down completely randomly.
Pair Corralation between NYSE Composite and Acadian Emerging
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.88 times more return on investment than Acadian Emerging. However, NYSE Composite is 1.14 times less risky than Acadian Emerging. It trades about 0.26 of its potential returns per unit of risk. Acadian Emerging Markets is currently generating about -0.15 per unit of risk. If you would invest 1,945,669 in NYSE Composite on August 30, 2024 and sell it today you would earn a total of 75,313 from holding NYSE Composite or generate 3.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
NYSE Composite vs. Acadian Emerging Markets
Performance |
| Timeline |
NYSE Composite and Acadian Emerging Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Acadian Emerging Markets
Pair trading matchups for Acadian Emerging
Pair Trading with NYSE Composite and Acadian Emerging
The main advantage of trading using opposite NYSE Composite and Acadian Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Acadian Emerging 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 Acadian Emerging will offset losses from the drop in Acadian Emerging's long position.| NYSE Composite vs. Delek Drilling | NYSE Composite vs. Helmerich and Payne | NYSE Composite vs. Waste Management | NYSE Composite vs. US Global Investors |
| Acadian Emerging vs. Driehaus Emerging Markets | Acadian Emerging vs. Oakmark International Small | Acadian Emerging vs. T Rowe Price | Acadian Emerging vs. Emerging Markets Portfolio |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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