Correlation Between NYSE Composite and First Busey
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and First Busey 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 First Busey into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and First Busey Corp, you can compare the effects of market volatilities on NYSE Composite and First Busey 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 First Busey. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and First Busey.
Diversification Opportunities for NYSE Composite and First Busey
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between NYSE and First is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and First Busey Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Busey Corp 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 First Busey. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Busey Corp has no effect on the direction of NYSE Composite i.e., NYSE Composite and First Busey go up and down completely randomly.
Pair Corralation between NYSE Composite and First Busey
Assuming the 90 days trading horizon NYSE Composite is expected to generate 1.28 times less return on investment than First Busey. But when comparing it to its historical volatility, NYSE Composite is 2.81 times less risky than First Busey. It trades about 0.11 of its potential returns per unit of risk. First Busey Corp is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2,003 in First Busey Corp on August 31, 2024 and sell it today you would earn a total of 666.00 from holding First Busey Corp or generate 33.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. First Busey Corp
Performance |
| Timeline |
NYSE Composite and First Busey Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
First Busey Corp
Pair trading matchups for First Busey
Pair Trading with NYSE Composite and First Busey
The main advantage of trading using opposite NYSE Composite and First Busey positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, First Busey 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 First Busey will offset losses from the drop in First Busey's long position.| NYSE Composite vs. Nextplat Corp | NYSE Composite vs. Qualys Inc | NYSE Composite vs. Cadence Design Systems | NYSE Composite vs. Asure Software |
| First Busey vs. Home Federal Bancorp | First Busey vs. First Financial Northwest | First Busey vs. First Northwest Bancorp | First Busey vs. First Capital |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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