Correlation Between NYSE Composite and Ascott Residence
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Ascott Residence 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 Ascott Residence into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Ascott Residence Trust, you can compare the effects of market volatilities on NYSE Composite and Ascott Residence 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 Ascott Residence. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Ascott Residence.
Diversification Opportunities for NYSE Composite and Ascott Residence
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between NYSE and Ascott is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Ascott Residence Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ascott Residence Trust 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 Ascott Residence. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ascott Residence Trust has no effect on the direction of NYSE Composite i.e., NYSE Composite and Ascott Residence go up and down completely randomly.
Pair Corralation between NYSE Composite and Ascott Residence
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.46 times more return on investment than Ascott Residence. However, NYSE Composite is 2.17 times less risky than Ascott Residence. It trades about 0.28 of its potential returns per unit of risk. Ascott Residence Trust is currently generating about -0.22 per unit of risk. If you would invest 1,926,142 in NYSE Composite on November 5, 2024 and sell it today you would earn a total of 73,740 from holding NYSE Composite or generate 3.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
NYSE Composite vs. Ascott Residence Trust
Performance |
| Timeline |
NYSE Composite and Ascott Residence Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Ascott Residence Trust
Pair trading matchups for Ascott Residence
Pair Trading with NYSE Composite and Ascott Residence
The main advantage of trading using opposite NYSE Composite and Ascott Residence positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Ascott Residence 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 Ascott Residence will offset losses from the drop in Ascott Residence's long position.| NYSE Composite vs. Aris Water Solutions | NYSE Composite vs. Marfrig Global Foods | NYSE Composite vs. CenterPoint Energy | NYSE Composite vs. Sysco |
| Ascott Residence vs. Global Net Lease, | Ascott Residence vs. Brightspire Capital | Ascott Residence vs. NexPoint Strategic Opportunities | Ascott Residence vs. Aquagold International |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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