Correlation Between NYSE Composite and Abraxas Petroleum
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Abraxas Petroleum 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 Abraxas Petroleum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Abraxas Petroleum, you can compare the effects of market volatilities on NYSE Composite and Abraxas Petroleum 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 Abraxas Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Abraxas Petroleum.
Diversification Opportunities for NYSE Composite and Abraxas Petroleum
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NYSE and Abraxas is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Abraxas Petroleum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Abraxas Petroleum 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 Abraxas Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Abraxas Petroleum has no effect on the direction of NYSE Composite i.e., NYSE Composite and Abraxas Petroleum go up and down completely randomly.
Pair Corralation between NYSE Composite and Abraxas Petroleum
If you would invest 1,945,669 in NYSE Composite on August 30, 2024 and sell it today you would earn a total of 75,313 from holding NYSE Composite or generate 3.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
NYSE Composite vs. Abraxas Petroleum
Performance |
| Timeline |
NYSE Composite and Abraxas Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Abraxas Petroleum
Pair trading matchups for Abraxas Petroleum
Pair Trading with NYSE Composite and Abraxas Petroleum
The main advantage of trading using opposite NYSE Composite and Abraxas Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Abraxas Petroleum 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 Abraxas Petroleum will offset losses from the drop in Abraxas Petroleum's long position.| NYSE Composite vs. Sphere Entertainment Co | NYSE Composite vs. Weibo Corp | NYSE Composite vs. BCE Inc | NYSE Composite vs. Pinterest |
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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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