Correlation Between NYSE Composite and Aware
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Aware 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 Aware into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Aware Inc, you can compare the effects of market volatilities on NYSE Composite and Aware 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 Aware. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Aware.
Diversification Opportunities for NYSE Composite and Aware
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NYSE and Aware is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Aware Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aware Inc 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 Aware. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aware Inc has no effect on the direction of NYSE Composite i.e., NYSE Composite and Aware go up and down completely randomly.
Pair Corralation between NYSE Composite and Aware
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.11 times more return on investment than Aware. However, NYSE Composite is 8.99 times less risky than Aware. It trades about 0.24 of its potential returns per unit of risk. Aware Inc is currently generating about -0.16 per unit of risk. If you would invest 1,954,967 in NYSE Composite on August 28, 2024 and sell it today you would earn a total of 66,978 from holding NYSE Composite or generate 3.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Aware Inc
Performance |
| Timeline |
NYSE Composite and Aware Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Aware Inc
Pair trading matchups for Aware
Pair Trading with NYSE Composite and Aware
The main advantage of trading using opposite NYSE Composite and Aware positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Aware 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 Aware will offset losses from the drop in Aware's long position.| NYSE Composite vs. Vita Coco | NYSE Composite vs. Franklin Wireless Corp | NYSE Composite vs. Ambev SA ADR | NYSE Composite vs. Toro Co |
| Aware vs. Xcelmobility | Aware vs. Pushfor Investments | Aware vs. CurrentC Power | Aware vs. Agent Information Software |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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