Correlation Between NYSE Composite and Axelar
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Axelar 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 Axelar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Axelar, you can compare the effects of market volatilities on NYSE Composite and Axelar 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 Axelar. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Axelar.
Diversification Opportunities for NYSE Composite and Axelar
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NYSE and Axelar is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Axelar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axelar 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 Axelar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axelar has no effect on the direction of NYSE Composite i.e., NYSE Composite and Axelar go up and down completely randomly.
Pair Corralation between NYSE Composite and Axelar
Assuming the 90 days trading horizon NYSE Composite is expected to generate 1.93 times less return on investment than Axelar. But when comparing it to its historical volatility, NYSE Composite is 11.41 times less risky than Axelar. It trades about 0.13 of its potential returns per unit of risk. Axelar is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 92.00 in Axelar on August 27, 2024 and sell it today you would lose (12.00) from holding Axelar or give up 13.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 54.44% |
| Values | Daily Returns |
NYSE Composite vs. Axelar
Performance |
| Timeline |
NYSE Composite and Axelar Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Axelar
Pair trading matchups for Axelar
Pair Trading with NYSE Composite and Axelar
The main advantage of trading using opposite NYSE Composite and Axelar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Axelar 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 Axelar will offset losses from the drop in Axelar's long position.| NYSE Composite vs. Grocery Outlet Holding | NYSE Composite vs. Tencent Music Entertainment | NYSE Composite vs. SunLink Health Systems | NYSE Composite vs. Getty Realty |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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