Correlation Between NYSE Composite and BQE Water
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and BQE Water 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 BQE Water into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and BQE Water, you can compare the effects of market volatilities on NYSE Composite and BQE Water 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 BQE Water. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and BQE Water.
Diversification Opportunities for NYSE Composite and BQE Water
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NYSE and BQE is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and BQE Water in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BQE Water 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 BQE Water. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BQE Water has no effect on the direction of NYSE Composite i.e., NYSE Composite and BQE Water go up and down completely randomly.
Pair Corralation between NYSE Composite and BQE Water
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.5 times more return on investment than BQE Water. However, NYSE Composite is 2.01 times less risky than BQE Water. It trades about 0.24 of its potential returns per unit of risk. BQE Water is currently generating about -0.31 per unit of risk. If you would invest 1,945,627 in NYSE Composite on August 26, 2024 and sell it today you would earn a total of 66,718 from holding NYSE Composite or generate 3.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. BQE Water
Performance |
| Timeline |
NYSE Composite and BQE Water Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
BQE Water
Pair trading matchups for BQE Water
Pair Trading with NYSE Composite and BQE Water
The main advantage of trading using opposite NYSE Composite and BQE Water positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, BQE Water 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 BQE Water will offset losses from the drop in BQE Water's long position.| NYSE Composite vs. Glacier Bancorp | NYSE Composite vs. LithiumBank Resources Corp | NYSE Composite vs. Stepstone Group | NYSE Composite vs. Pintec Technology Holdings |
| BQE Water vs. JPX Global | BQE Water vs. Susglobal Energy Corp | BQE Water vs. Houston Natural Resources | BQE Water vs. Agilyx AS |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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