Correlation Between NYSE Composite and Brigade High
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Brigade High 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 Brigade High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Brigade High Income, you can compare the effects of market volatilities on NYSE Composite and Brigade High 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 Brigade High. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Brigade High.
Diversification Opportunities for NYSE Composite and Brigade High
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between NYSE and Brigade is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Brigade High Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brigade High Income 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 Brigade High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brigade High Income has no effect on the direction of NYSE Composite i.e., NYSE Composite and Brigade High go up and down completely randomly.
Pair Corralation between NYSE Composite and Brigade High
Assuming the 90 days trading horizon NYSE Composite is expected to generate 3.6 times more return on investment than Brigade High. However, NYSE Composite is 3.6 times more volatile than Brigade High Income. It trades about 0.24 of its potential returns per unit of risk. Brigade High Income is currently generating about 0.12 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 67,069 from holding NYSE Composite or generate 3.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Brigade High Income
Performance |
| Timeline |
NYSE Composite and Brigade High Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Brigade High Income
Pair trading matchups for Brigade High
Pair Trading with NYSE Composite and Brigade High
The main advantage of trading using opposite NYSE Composite and Brigade High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Brigade High 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 Brigade High will offset losses from the drop in Brigade High's long position.| NYSE Composite vs. Hooker Furniture | NYSE Composite vs. Hudson Pacific Properties | NYSE Composite vs. Canlan Ice Sports | NYSE Composite vs. Boston Properties |
| Brigade High vs. Financial Investors Trust | Brigade High vs. ALPSSmith Credit Opportunities | Brigade High vs. ALPSSmith Credit Opportunities | Brigade High vs. DEUTSCHE MID CAP |
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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