Correlation Between NYSE Composite and AXT
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and AXT 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 AXT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and AXT Inc, you can compare the effects of market volatilities on NYSE Composite and AXT 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 AXT. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and AXT.
Diversification Opportunities for NYSE Composite and AXT
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NYSE and AXT is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and AXT Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AXT 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 AXT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AXT Inc has no effect on the direction of NYSE Composite i.e., NYSE Composite and AXT go up and down completely randomly.
Pair Corralation between NYSE Composite and AXT
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.16 times more return on investment than AXT. However, NYSE Composite is 6.2 times less risky than AXT. It trades about 0.28 of its potential returns per unit of risk. AXT Inc is currently generating about -0.07 per unit of risk. If you would invest 1,926,142 in NYSE Composite on November 5, 2024 and sell it today you would earn a total of 73,740 from holding NYSE Composite or generate 3.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. AXT Inc
Performance |
| Timeline |
NYSE Composite and AXT Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
AXT Inc
Pair trading matchups for AXT
Pair Trading with NYSE Composite and AXT
The main advantage of trading using opposite NYSE Composite and AXT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, AXT 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 AXT will offset losses from the drop in AXT's long position.| NYSE Composite vs. Aris Water Solutions | NYSE Composite vs. Marfrig Global Foods | NYSE Composite vs. CenterPoint Energy | NYSE Composite vs. Sysco |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
Other Complementary Tools
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum |