Correlation Between NYSE Composite and Bts Managed
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Bts Managed 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 Bts Managed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Bts Managed Income, you can compare the effects of market volatilities on NYSE Composite and Bts Managed 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 Bts Managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Bts Managed.
Diversification Opportunities for NYSE Composite and Bts Managed
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between NYSE and Bts is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Bts Managed Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bts Managed Income 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 Bts Managed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bts Managed Income has no effect on the direction of NYSE Composite i.e., NYSE Composite and Bts Managed go up and down completely randomly.
Pair Corralation between NYSE Composite and Bts Managed
Assuming the 90 days trading horizon NYSE Composite is expected to generate 2.75 times more return on investment than Bts Managed. However, NYSE Composite is 2.75 times more volatile than Bts Managed Income. It trades about 0.14 of its potential returns per unit of risk. Bts Managed Income is currently generating about 0.14 per unit of risk. If you would invest 1,951,644 in NYSE Composite on August 31, 2024 and sell it today you would earn a total of 69,338 from holding NYSE Composite or generate 3.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Bts Managed Income
Performance |
| Timeline |
NYSE Composite and Bts Managed Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Bts Managed Income
Pair trading matchups for Bts Managed
Pair Trading with NYSE Composite and Bts Managed
The main advantage of trading using opposite NYSE Composite and Bts Managed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Bts Managed 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 Bts Managed will offset losses from the drop in Bts Managed's long position.| NYSE Composite vs. Nextplat Corp | NYSE Composite vs. Qualys Inc | NYSE Composite vs. Cadence Design Systems | NYSE Composite vs. Asure Software |
| Bts Managed vs. Global Technology Portfolio | Bts Managed vs. Technology Ultrasector Profund | Bts Managed vs. Janus Global Technology | Bts Managed vs. Towpath Technology |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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