Correlation Between NYSE Composite and At Mid
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and At Mid 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 At Mid into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and At Mid Cap, you can compare the effects of market volatilities on NYSE Composite and At Mid 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 At Mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and At Mid.
Diversification Opportunities for NYSE Composite and At Mid
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NYSE and AWMIX is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and At Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on At Mid Cap 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 At Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of At Mid Cap has no effect on the direction of NYSE Composite i.e., NYSE Composite and At Mid go up and down completely randomly.
Pair Corralation between NYSE Composite and At Mid
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.68 times more return on investment than At Mid. However, NYSE Composite is 1.47 times less risky than At Mid. It trades about -0.05 of its potential returns per unit of risk. At Mid Cap is currently generating about -0.22 per unit of risk. If you would invest 1,998,000 in NYSE Composite on November 27, 2024 and sell it today you would lose (12,080) from holding NYSE Composite or give up 0.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. At Mid Cap
Performance |
| Timeline |
NYSE Composite and At Mid Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
At Mid Cap
Pair trading matchups for At Mid
Pair Trading with NYSE Composite and At Mid
The main advantage of trading using opposite NYSE Composite and At Mid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, At Mid 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 At Mid will offset losses from the drop in At Mid's long position.| NYSE Composite vs. Unum Group | NYSE Composite vs. Palomar Holdings | NYSE Composite vs. Fidelity National Financial | NYSE Composite vs. ZW Data Action |
| At Mid vs. Metropolitan West Ultra | At Mid vs. Templeton Developing Markets | At Mid vs. Aqr Sustainable Long Short | At Mid vs. Transamerica Emerging Markets |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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