Correlation Between NYSE Composite and Andover Bancorp
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Andover Bancorp 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 Andover Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Andover Bancorp, you can compare the effects of market volatilities on NYSE Composite and Andover Bancorp 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 Andover Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Andover Bancorp.
Diversification Opportunities for NYSE Composite and Andover Bancorp
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between NYSE and Andover is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Andover Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Andover Bancorp 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 Andover Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Andover Bancorp has no effect on the direction of NYSE Composite i.e., NYSE Composite and Andover Bancorp go up and down completely randomly.
Pair Corralation between NYSE Composite and Andover Bancorp
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.28 times more return on investment than Andover Bancorp. However, NYSE Composite is 3.62 times less risky than Andover Bancorp. It trades about 0.15 of its potential returns per unit of risk. Andover Bancorp is currently generating about 0.02 per unit of risk. If you would invest 1,793,449 in NYSE Composite on September 2, 2024 and sell it today you would earn a total of 233,755 from holding NYSE Composite or generate 13.03% 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. Andover Bancorp
Performance |
| Timeline |
NYSE Composite and Andover Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Andover Bancorp
Pair trading matchups for Andover Bancorp
Pair Trading with NYSE Composite and Andover Bancorp
The main advantage of trading using opposite NYSE Composite and Andover Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Andover Bancorp 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 Andover Bancorp will offset losses from the drop in Andover Bancorp's long position.| NYSE Composite vs. Simon Property Group | NYSE Composite vs. Merit Medical Systems | NYSE Composite vs. Catalent | NYSE Composite vs. Titan Machinery |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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