Correlation Between NYSE Composite and Applied UV
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Applied UV 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 Applied UV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Applied UV Preferred, you can compare the effects of market volatilities on NYSE Composite and Applied UV 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 Applied UV. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Applied UV.
Diversification Opportunities for NYSE Composite and Applied UV
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between NYSE and Applied is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Applied UV Preferred in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Applied UV Preferred 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 Applied UV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Applied UV Preferred has no effect on the direction of NYSE Composite i.e., NYSE Composite and Applied UV go up and down completely randomly.
Pair Corralation between NYSE Composite and Applied UV
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.04 times more return on investment than Applied UV. However, NYSE Composite is 25.0 times less risky than Applied UV. It trades about 0.08 of its potential returns per unit of risk. Applied UV Preferred is currently generating about 0.0 per unit of risk. If you would invest 1,546,867 in NYSE Composite on September 2, 2024 and sell it today you would earn a total of 480,337 from holding NYSE Composite or generate 31.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 82.86% |
| Values | Daily Returns |
NYSE Composite vs. Applied UV Preferred
Performance |
| Timeline |
NYSE Composite and Applied UV Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Applied UV Preferred
Pair trading matchups for Applied UV
Pair Trading with NYSE Composite and Applied UV
The main advantage of trading using opposite NYSE Composite and Applied UV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Applied UV 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 Applied UV will offset losses from the drop in Applied UV's long position.| NYSE Composite vs. Simon Property Group | NYSE Composite vs. Merit Medical Systems | NYSE Composite vs. Catalent | NYSE Composite vs. Titan Machinery |
| Applied UV vs. FAT Brands | Applied UV vs. Cadiz Depositary Shares | Applied UV vs. Atlanticus Holdings Corp | Applied UV vs. Presidio Property Trust |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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