Correlation Between NYSE Composite and Bimini Capital
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Bimini Capital 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 Bimini Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Bimini Capital Management, you can compare the effects of market volatilities on NYSE Composite and Bimini Capital 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 Bimini Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Bimini Capital.
Diversification Opportunities for NYSE Composite and Bimini Capital
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between NYSE and Bimini is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Bimini Capital Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bimini Capital Management 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 Bimini Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bimini Capital Management has no effect on the direction of NYSE Composite i.e., NYSE Composite and Bimini Capital go up and down completely randomly.
Pair Corralation between NYSE Composite and Bimini Capital
Assuming the 90 days trading horizon NYSE Composite is expected to generate 7.63 times less return on investment than Bimini Capital. But when comparing it to its historical volatility, NYSE Composite is 11.45 times less risky than Bimini Capital. It trades about 0.13 of its potential returns per unit of risk. Bimini Capital Management is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 66.00 in Bimini Capital Management on August 29, 2024 and sell it today you would earn a total of 42.00 from holding Bimini Capital Management or generate 63.64% 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. Bimini Capital Management
Performance |
| Timeline |
NYSE Composite and Bimini Capital Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Bimini Capital Management
Pair trading matchups for Bimini Capital
Pair Trading with NYSE Composite and Bimini Capital
The main advantage of trading using opposite NYSE Composite and Bimini Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Bimini Capital 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 Bimini Capital will offset losses from the drop in Bimini Capital's long position.| NYSE Composite vs. Vita Coco | NYSE Composite vs. Franklin Wireless Corp | NYSE Composite vs. Ambev SA ADR | NYSE Composite vs. Toro Co |
| Bimini Capital vs. Elysee Development Corp | Bimini Capital vs. Azimut Holding SpA | Bimini Capital vs. Blackhawk Growth Corp | Bimini Capital vs. Ameritrans Capital Corp |
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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