Correlation Between NYSE Composite and BAIYU Holdings
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and BAIYU 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 BAIYU 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 BAIYU Holdings, you can compare the effects of market volatilities on NYSE Composite and BAIYU 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 BAIYU Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and BAIYU Holdings.
Diversification Opportunities for NYSE Composite and BAIYU Holdings
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between NYSE and BAIYU is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and BAIYU Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BAIYU 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 BAIYU Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BAIYU Holdings has no effect on the direction of NYSE Composite i.e., NYSE Composite and BAIYU Holdings go up and down completely randomly.
Pair Corralation between NYSE Composite and BAIYU Holdings
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.06 times more return on investment than BAIYU Holdings. However, NYSE Composite is 17.1 times less risky than BAIYU Holdings. It trades about 0.14 of its potential returns per unit of risk. BAIYU Holdings is currently generating about -0.05 per unit of risk. If you would invest 1,800,696 in NYSE Composite on August 30, 2024 and sell it today you would earn a total of 220,286 from holding NYSE Composite or generate 12.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 96.03% |
| Values | Daily Returns |
NYSE Composite vs. BAIYU Holdings
Performance |
| Timeline |
NYSE Composite and BAIYU Holdings Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
BAIYU Holdings
Pair trading matchups for BAIYU Holdings
Pair Trading with NYSE Composite and BAIYU Holdings
The main advantage of trading using opposite NYSE Composite and BAIYU Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, BAIYU 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 BAIYU Holdings will offset losses from the drop in BAIYU Holdings' long position.| NYSE Composite vs. Delek Drilling | NYSE Composite vs. Helmerich and Payne | NYSE Composite vs. Waste Management | NYSE Composite vs. US Global Investors |
| BAIYU Holdings vs. Western Digital | BAIYU Holdings vs. Viemed Healthcare | BAIYU Holdings vs. Meiwu Technology Co | BAIYU Holdings vs. Centessa Pharmaceuticals PLC |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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