Correlation Between NYSE Composite and Awakn Life
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Awakn Life 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 Awakn Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Awakn Life Sciences, you can compare the effects of market volatilities on NYSE Composite and Awakn Life 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 Awakn Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Awakn Life.
Diversification Opportunities for NYSE Composite and Awakn Life
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between NYSE and Awakn is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Awakn Life Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Awakn Life Sciences 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 Awakn Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Awakn Life Sciences has no effect on the direction of NYSE Composite i.e., NYSE Composite and Awakn Life go up and down completely randomly.
Pair Corralation between NYSE Composite and Awakn Life
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.07 times more return on investment than Awakn Life. However, NYSE Composite is 13.6 times less risky than Awakn Life. It trades about 0.42 of its potential returns per unit of risk. Awakn Life Sciences is currently generating about 0.01 per unit of risk. If you would invest 1,923,895 in NYSE Composite on September 1, 2024 and sell it today you would earn a total of 103,309 from holding NYSE Composite or generate 5.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Awakn Life Sciences
Performance |
| Timeline |
NYSE Composite and Awakn Life Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Awakn Life Sciences
Pair trading matchups for Awakn Life
Pair Trading with NYSE Composite and Awakn Life
The main advantage of trading using opposite NYSE Composite and Awakn Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Awakn Life 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 Awakn Life will offset losses from the drop in Awakn Life's long position.| NYSE Composite vs. Acumen Pharmaceuticals | NYSE Composite vs. Mind Medicine | NYSE Composite vs. NL Industries | NYSE Composite vs. Ecovyst |
| Awakn Life vs. Rigel Pharmaceuticals | Awakn Life vs. Geron | Awakn Life vs. Verastem | Awakn Life vs. Immutep Ltd ADR |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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