Correlation Between NYSE Composite and BOC Hong
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and BOC Hong 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 BOC Hong into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and BOC Hong Kong, you can compare the effects of market volatilities on NYSE Composite and BOC Hong 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 BOC Hong. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and BOC Hong.
Diversification Opportunities for NYSE Composite and BOC Hong
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NYSE and BOC is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and BOC Hong Kong in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BOC Hong Kong 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 BOC Hong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BOC Hong Kong has no effect on the direction of NYSE Composite i.e., NYSE Composite and BOC Hong go up and down completely randomly.
Pair Corralation between NYSE Composite and BOC Hong
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.36 times more return on investment than BOC Hong. However, NYSE Composite is 2.79 times less risky than BOC Hong. It trades about 0.29 of its potential returns per unit of risk. BOC Hong Kong is currently generating about -0.07 per unit of risk. If you would invest 1,941,627 in NYSE Composite on August 31, 2024 and sell it today you would earn a total of 79,355 from holding NYSE Composite or generate 4.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. BOC Hong Kong
Performance |
| Timeline |
NYSE Composite and BOC Hong Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
BOC Hong Kong
Pair trading matchups for BOC Hong
Pair Trading with NYSE Composite and BOC Hong
The main advantage of trading using opposite NYSE Composite and BOC Hong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, BOC Hong 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 BOC Hong will offset losses from the drop in BOC Hong's long position.| NYSE Composite vs. Nextplat Corp | NYSE Composite vs. Qualys Inc | NYSE Composite vs. Cadence Design Systems | NYSE Composite vs. Asure Software |
| BOC Hong vs. Bank Mandiri Persero | BOC Hong vs. Piraeus Bank SA | BOC Hong vs. Eurobank Ergasias Services | BOC Hong vs. Kasikornbank Public Co |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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