Correlation Between NYSE Composite and APx Acquisition
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and APx Acquisition 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 APx Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and APx Acquisition I, you can compare the effects of market volatilities on NYSE Composite and APx Acquisition 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 APx Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and APx Acquisition.
Diversification Opportunities for NYSE Composite and APx Acquisition
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NYSE and APx is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and APx Acquisition I in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on APx Acquisition I 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 APx Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of APx Acquisition I has no effect on the direction of NYSE Composite i.e., NYSE Composite and APx Acquisition go up and down completely randomly.
Pair Corralation between NYSE Composite and APx Acquisition
Assuming the 90 days trading horizon NYSE Composite is expected to generate 4.13 times more return on investment than APx Acquisition. However, NYSE Composite is 4.13 times more volatile than APx Acquisition I. It trades about 0.14 of its potential returns per unit of risk. APx Acquisition I is currently generating about 0.17 per unit of risk. If you would invest 1,798,563 in NYSE Composite on September 5, 2024 and sell it today you would earn a total of 220,018 from holding NYSE Composite or generate 12.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. APx Acquisition I
Performance |
| Timeline |
NYSE Composite and APx Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
APx Acquisition I
Pair trading matchups for APx Acquisition
Pair Trading with NYSE Composite and APx Acquisition
The main advantage of trading using opposite NYSE Composite and APx Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, APx Acquisition 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 APx Acquisition will offset losses from the drop in APx Acquisition's long position.| NYSE Composite vs. Air Products and | NYSE Composite vs. Playtika Holding Corp | NYSE Composite vs. PepsiCo | NYSE Composite vs. NETGEAR |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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