Correlation Between NYSE Composite and Aspen Digital
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Aspen Digital 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 Aspen Digital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Aspen Digital, you can compare the effects of market volatilities on NYSE Composite and Aspen Digital 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 Aspen Digital. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Aspen Digital.
Diversification Opportunities for NYSE Composite and Aspen Digital
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NYSE and Aspen is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Aspen Digital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aspen Digital 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 Aspen Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aspen Digital has no effect on the direction of NYSE Composite i.e., NYSE Composite and Aspen Digital go up and down completely randomly.
Pair Corralation between NYSE Composite and Aspen Digital
Assuming the 90 days trading horizon NYSE Composite is expected to generate 1.32 times less return on investment than Aspen Digital. But when comparing it to its historical volatility, NYSE Composite is 4.27 times less risky than Aspen Digital. It trades about 0.11 of its potential returns per unit of risk. Aspen Digital is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 280.00 in Aspen Digital on August 28, 2024 and sell it today you would earn a total of 57.00 from holding Aspen Digital or generate 20.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.72% |
| Values | Daily Returns |
NYSE Composite vs. Aspen Digital
Performance |
| Timeline |
NYSE Composite and Aspen Digital Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Aspen Digital
Pair trading matchups for Aspen Digital
Pair Trading with NYSE Composite and Aspen Digital
The main advantage of trading using opposite NYSE Composite and Aspen Digital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Aspen Digital 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 Aspen Digital will offset losses from the drop in Aspen Digital's long position.| NYSE Composite vs. Vita Coco | NYSE Composite vs. Franklin Wireless Corp | NYSE Composite vs. Ambev SA ADR | NYSE Composite vs. Toro Co |
| Aspen Digital vs. Copa Holdings SA | Aspen Digital vs. United Airlines Holdings | Aspen Digital vs. Delta Air Lines | Aspen Digital vs. SkyWest |
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.
Other Complementary Tools
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |