Correlation Between NYSE Composite and Amana Income
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Amana Income 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 Amana Income into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Amana Income Fund, you can compare the effects of market volatilities on NYSE Composite and Amana Income 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 Amana Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Amana Income.
Diversification Opportunities for NYSE Composite and Amana Income
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between NYSE and Amana is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Amana Income Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amana Income 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 Amana Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amana Income has no effect on the direction of NYSE Composite i.e., NYSE Composite and Amana Income go up and down completely randomly.
Pair Corralation between NYSE Composite and Amana Income
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.77 times more return on investment than Amana Income. However, NYSE Composite is 1.29 times less risky than Amana Income. It trades about 0.02 of its potential returns per unit of risk. Amana Income Fund is currently generating about 0.0 per unit of risk. If you would invest 1,985,329 in NYSE Composite on September 13, 2024 and sell it today you would earn a total of 3,774 from holding NYSE Composite or generate 0.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Amana Income Fund
Performance |
| Timeline |
NYSE Composite and Amana Income Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Amana Income Fund
Pair trading matchups for Amana Income
Pair Trading with NYSE Composite and Amana Income
The main advantage of trading using opposite NYSE Composite and Amana Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Amana Income 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 Amana Income will offset losses from the drop in Amana Income's long position.| NYSE Composite vs. Boston Beer | NYSE Composite vs. Freedom Bank of | NYSE Composite vs. KeyCorp | NYSE Composite vs. LithiumBank Resources Corp |
| Amana Income vs. Amana Growth Fund | Amana Income vs. Amana Developing World | Amana Income vs. Amana Developing World | Amana Income vs. Amana Income Fund |
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 CEOs Directory module to screen CEOs from public companies around the world.
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