Correlation Between NYSE Composite and Aeluma
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Aeluma 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 Aeluma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Aeluma Inc, you can compare the effects of market volatilities on NYSE Composite and Aeluma 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 Aeluma. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Aeluma.
Diversification Opportunities for NYSE Composite and Aeluma
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NYSE and Aeluma is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Aeluma Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aeluma Inc 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 Aeluma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aeluma Inc has no effect on the direction of NYSE Composite i.e., NYSE Composite and Aeluma go up and down completely randomly.
Pair Corralation between NYSE Composite and Aeluma
Assuming the 90 days trading horizon NYSE Composite is expected to generate 2.9 times less return on investment than Aeluma. But when comparing it to its historical volatility, NYSE Composite is 9.61 times less risky than Aeluma. It trades about 0.42 of its potential returns per unit of risk. Aeluma Inc is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 309.00 in Aeluma Inc on September 1, 2024 and sell it today you would earn a total of 41.00 from holding Aeluma Inc or generate 13.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
NYSE Composite vs. Aeluma Inc
Performance |
| Timeline |
NYSE Composite and Aeluma Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Aeluma Inc
Pair trading matchups for Aeluma
Pair Trading with NYSE Composite and Aeluma
The main advantage of trading using opposite NYSE Composite and Aeluma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Aeluma 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 Aeluma will offset losses from the drop in Aeluma's long position.| NYSE Composite vs. Acumen Pharmaceuticals | NYSE Composite vs. Mind Medicine | NYSE Composite vs. NL Industries | NYSE Composite vs. Ecovyst |
| Aeluma vs. Power Integrations | Aeluma vs. MACOM Technology Solutions | Aeluma vs. Intchains Group Limited | Aeluma vs. Vishay Intertechnology |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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