Correlation Between NYSE Composite and Beach Energy
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Beach Energy 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 Beach Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Beach Energy, you can compare the effects of market volatilities on NYSE Composite and Beach Energy 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 Beach Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Beach Energy.
Diversification Opportunities for NYSE Composite and Beach Energy
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NYSE and Beach is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Beach Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beach Energy 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 Beach Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beach Energy has no effect on the direction of NYSE Composite i.e., NYSE Composite and Beach Energy go up and down completely randomly.
Pair Corralation between NYSE Composite and Beach Energy
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.14 times more return on investment than Beach Energy. However, NYSE Composite is 6.95 times less risky than Beach Energy. It trades about 0.14 of its potential returns per unit of risk. Beach Energy is currently generating about 0.0 per unit of risk. If you would invest 1,608,884 in NYSE Composite on August 26, 2024 and sell it today you would earn a total of 403,461 from holding NYSE Composite or generate 25.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 77.91% |
| Values | Daily Returns |
NYSE Composite vs. Beach Energy
Performance |
| Timeline |
NYSE Composite and Beach Energy Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Beach Energy
Pair trading matchups for Beach Energy
Pair Trading with NYSE Composite and Beach Energy
The main advantage of trading using opposite NYSE Composite and Beach Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Beach Energy 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 Beach Energy will offset losses from the drop in Beach Energy'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 |
| Beach Energy vs. EOG Resources | Beach Energy vs. Devon Energy | Beach Energy vs. Marathon Oil | Beach Energy vs. Diamondback Energy |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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