Correlation Between NYSE Composite and AmeriServ Financial
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and AmeriServ Financial 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 AmeriServ Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and AmeriServ Financial, you can compare the effects of market volatilities on NYSE Composite and AmeriServ Financial 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 AmeriServ Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and AmeriServ Financial.
Diversification Opportunities for NYSE Composite and AmeriServ Financial
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NYSE and AmeriServ is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and AmeriServ Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AmeriServ Financial 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 AmeriServ Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AmeriServ Financial has no effect on the direction of NYSE Composite i.e., NYSE Composite and AmeriServ Financial go up and down completely randomly.
Pair Corralation between NYSE Composite and AmeriServ Financial
Assuming the 90 days trading horizon NYSE Composite is expected to generate 1.39 times less return on investment than AmeriServ Financial. But when comparing it to its historical volatility, NYSE Composite is 4.13 times less risky than AmeriServ Financial. It trades about 0.17 of its potential returns per unit of risk. AmeriServ Financial is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 267.00 in AmeriServ Financial on September 3, 2024 and sell it today you would earn a total of 20.00 from holding AmeriServ Financial or generate 7.49% 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. AmeriServ Financial
Performance |
| Timeline |
NYSE Composite and AmeriServ Financial Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
AmeriServ Financial
Pair trading matchups for AmeriServ Financial
Pair Trading with NYSE Composite and AmeriServ Financial
The main advantage of trading using opposite NYSE Composite and AmeriServ Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, AmeriServ Financial 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 AmeriServ Financial will offset losses from the drop in AmeriServ Financial's long position.| NYSE Composite vs. Lindblad Expeditions Holdings | NYSE Composite vs. LB Foster | NYSE Composite vs. HUTCHMED DRC | NYSE Composite vs. Bridgford Foods |
| AmeriServ Financial vs. JPMorgan Chase Co | AmeriServ Financial vs. Citigroup | AmeriServ Financial vs. Wells Fargo | AmeriServ Financial vs. Toronto Dominion Bank |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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