Correlation Between NYSE Composite and Aquila Three
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Aquila Three 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 Aquila Three into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Aquila Three Peaks, you can compare the effects of market volatilities on NYSE Composite and Aquila Three 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 Aquila Three. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Aquila Three.
Diversification Opportunities for NYSE Composite and Aquila Three
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between NYSE and Aquila is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Aquila Three Peaks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aquila Three Peaks 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 Aquila Three. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aquila Three Peaks has no effect on the direction of NYSE Composite i.e., NYSE Composite and Aquila Three go up and down completely randomly.
Pair Corralation between NYSE Composite and Aquila Three
Assuming the 90 days trading horizon NYSE Composite is expected to generate 1.69 times less return on investment than Aquila Three. But when comparing it to its historical volatility, NYSE Composite is 1.46 times less risky than Aquila Three. It trades about 0.19 of its potential returns per unit of risk. Aquila Three Peaks is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 4,458 in Aquila Three Peaks on August 25, 2024 and sell it today you would earn a total of 218.00 from holding Aquila Three Peaks or generate 4.89% 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. Aquila Three Peaks
Performance |
| Timeline |
NYSE Composite and Aquila Three Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Aquila Three Peaks
Pair trading matchups for Aquila Three
Pair Trading with NYSE Composite and Aquila Three
The main advantage of trading using opposite NYSE Composite and Aquila Three positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Aquila Three 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 Aquila Three will offset losses from the drop in Aquila Three's long position.| NYSE Composite vs. Glacier Bancorp | NYSE Composite vs. LithiumBank Resources Corp | NYSE Composite vs. Stepstone Group | NYSE Composite vs. Pintec Technology Holdings |
| Aquila Three vs. Ab Select Longshort | Aquila Three vs. Guggenheim Long Short | Aquila Three vs. Aqr Long Short Equity | Aquila Three vs. Barings Active Short |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |