Correlation Between NYSE Composite and Brooge Energy
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Brooge 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 Brooge 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 Brooge Energy Limited, you can compare the effects of market volatilities on NYSE Composite and Brooge 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 Brooge Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Brooge Energy.
Diversification Opportunities for NYSE Composite and Brooge Energy
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NYSE and Brooge is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Brooge Energy Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brooge Energy Limited 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 Brooge Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brooge Energy Limited has no effect on the direction of NYSE Composite i.e., NYSE Composite and Brooge Energy go up and down completely randomly.
Pair Corralation between NYSE Composite and Brooge Energy
Assuming the 90 days trading horizon NYSE Composite is expected to generate 266.17 times less return on investment than Brooge Energy. But when comparing it to its historical volatility, NYSE Composite is 160.29 times less risky than Brooge Energy. It trades about 0.08 of its potential returns per unit of risk. Brooge Energy Limited is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 25.00 in Brooge Energy Limited on August 24, 2024 and sell it today you would lose (24.85) from holding Brooge Energy Limited or give up 99.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 66.53% |
| Values | Daily Returns |
NYSE Composite vs. Brooge Energy Limited
Performance |
| Timeline |
NYSE Composite and Brooge Energy Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Brooge Energy Limited
Pair trading matchups for Brooge Energy
Pair Trading with NYSE Composite and Brooge Energy
The main advantage of trading using opposite NYSE Composite and Brooge Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Brooge 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 Brooge Energy will offset losses from the drop in Brooge Energy's long position.| NYSE Composite vs. Awilco Drilling PLC | NYSE Composite vs. AKITA Drilling | NYSE Composite vs. SunOpta | NYSE Composite vs. Delek Drilling |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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