Correlation Between NYSE Composite and Austal
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Austal 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 Austal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Austal Limited, you can compare the effects of market volatilities on NYSE Composite and Austal 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 Austal. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Austal.
Diversification Opportunities for NYSE Composite and Austal
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NYSE and Austal is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Austal Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Austal Limited 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 Austal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Austal Limited has no effect on the direction of NYSE Composite i.e., NYSE Composite and Austal go up and down completely randomly.
Pair Corralation between NYSE Composite and Austal
Assuming the 90 days trading horizon NYSE Composite is expected to generate 2.75 times less return on investment than Austal. But when comparing it to its historical volatility, NYSE Composite is 5.92 times less risky than Austal. It trades about 0.08 of its potential returns per unit of risk. Austal Limited is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 148.00 in Austal Limited on August 26, 2024 and sell it today you would earn a total of 52.00 from holding Austal Limited or generate 35.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.79% |
| Values | Daily Returns |
NYSE Composite vs. Austal Limited
Performance |
| Timeline |
NYSE Composite and Austal Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Austal Limited
Pair trading matchups for Austal
Pair Trading with NYSE Composite and Austal
The main advantage of trading using opposite NYSE Composite and Austal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Austal 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 Austal will offset losses from the drop in Austal'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 |
| Austal vs. 808 Renewable Energy | Austal vs. Sky Harbour Group | Austal vs. VirTra Inc | Austal vs. Firan Technology Group |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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