Correlation Between NYSE Composite and Aristotle Funds
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Aristotle Funds 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 Aristotle Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Aristotle Funds Series, you can compare the effects of market volatilities on NYSE Composite and Aristotle Funds 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 Aristotle Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Aristotle Funds.
Diversification Opportunities for NYSE Composite and Aristotle Funds
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between NYSE and Aristotle is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Aristotle Funds Series in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aristotle Funds Series 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 Aristotle Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aristotle Funds Series has no effect on the direction of NYSE Composite i.e., NYSE Composite and Aristotle Funds go up and down completely randomly.
Pair Corralation between NYSE Composite and Aristotle Funds
Assuming the 90 days trading horizon NYSE Composite is expected to generate 1.21 times less return on investment than Aristotle Funds. But when comparing it to its historical volatility, NYSE Composite is 1.61 times less risky than Aristotle Funds. It trades about 0.14 of its potential returns per unit of risk. Aristotle Funds Series is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 823.00 in Aristotle Funds Series on September 1, 2024 and sell it today you would earn a total of 123.00 from holding Aristotle Funds Series or generate 14.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Aristotle Funds Series
Performance |
| Timeline |
NYSE Composite and Aristotle Funds Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Aristotle Funds Series
Pair trading matchups for Aristotle Funds
Pair Trading with NYSE Composite and Aristotle Funds
The main advantage of trading using opposite NYSE Composite and Aristotle Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Aristotle Funds 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 Aristotle Funds will offset losses from the drop in Aristotle Funds' long position.| NYSE Composite vs. Acumen Pharmaceuticals | NYSE Composite vs. Mind Medicine | NYSE Composite vs. NL Industries | NYSE Composite vs. Ecovyst |
| Aristotle Funds vs. Aristotle Funds Series | Aristotle Funds vs. Aristotle Funds Series | Aristotle Funds vs. Aristotle International Eq | Aristotle Funds vs. Aristotle Funds Series |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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