Correlation Between NYSE Composite and Scepter Holdings
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Scepter Holdings 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 Scepter Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Scepter Holdings, you can compare the effects of market volatilities on NYSE Composite and Scepter Holdings 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 Scepter Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Scepter Holdings.
Diversification Opportunities for NYSE Composite and Scepter Holdings
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between NYSE and Scepter is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Scepter Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scepter Holdings 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 Scepter Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scepter Holdings has no effect on the direction of NYSE Composite i.e., NYSE Composite and Scepter Holdings go up and down completely randomly.
Pair Corralation between NYSE Composite and Scepter Holdings
Assuming the 90 days trading horizon NYSE Composite is expected to generate 1.28 times less return on investment than Scepter Holdings. But when comparing it to its historical volatility, NYSE Composite is 48.84 times less risky than Scepter Holdings. It trades about 0.42 of its potential returns per unit of risk. Scepter Holdings is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 0.16 in Scepter Holdings on September 1, 2024 and sell it today you would lose (0.09) from holding Scepter Holdings or give up 56.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Scepter Holdings
Performance |
| Timeline |
NYSE Composite and Scepter Holdings Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Scepter Holdings
Pair trading matchups for Scepter Holdings
Pair Trading with NYSE Composite and Scepter Holdings
The main advantage of trading using opposite NYSE Composite and Scepter Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Scepter Holdings 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 Scepter Holdings will offset losses from the drop in Scepter Holdings' long position.| NYSE Composite vs. Acumen Pharmaceuticals | NYSE Composite vs. Mind Medicine | NYSE Composite vs. NL Industries | NYSE Composite vs. Ecovyst |
| Scepter Holdings vs. The A2 Milk | Scepter Holdings vs. Altavoz Entertainment | Scepter Holdings vs. Artisan Consumer Goods | Scepter Holdings vs. General Mills |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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