Correlation Between NYSE Composite and BKSY WT
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and BKSY WT 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 BKSY WT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and BKSY WT, you can compare the effects of market volatilities on NYSE Composite and BKSY WT 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 BKSY WT. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and BKSY WT.
Diversification Opportunities for NYSE Composite and BKSY WT
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between NYSE and BKSY is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and BKSY WT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BKSY WT 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 BKSY WT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BKSY WT has no effect on the direction of NYSE Composite i.e., NYSE Composite and BKSY WT go up and down completely randomly.
Pair Corralation between NYSE Composite and BKSY WT
Assuming the 90 days trading horizon NYSE Composite is expected to generate 36.8 times less return on investment than BKSY WT. But when comparing it to its historical volatility, NYSE Composite is 23.47 times less risky than BKSY WT. It trades about 0.08 of its potential returns per unit of risk. BKSY WT is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 3.45 in BKSY WT on September 2, 2024 and sell it today you would earn a total of 3.94 from holding BKSY WT or generate 114.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 21.57% |
| Values | Daily Returns |
NYSE Composite vs. BKSY WT
Performance |
| Timeline |
NYSE Composite and BKSY WT Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
BKSY WT
Pair trading matchups for BKSY WT
Pair Trading with NYSE Composite and BKSY WT
The main advantage of trading using opposite NYSE Composite and BKSY WT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, BKSY WT 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 BKSY WT will offset losses from the drop in BKSY WT's long position.| NYSE Composite vs. Simon Property Group | NYSE Composite vs. Merit Medical Systems | NYSE Composite vs. Catalent | NYSE Composite vs. Titan Machinery |
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 CEOs Directory module to screen CEOs from public companies around the world.
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