Correlation Between NYSE Composite and Café Serendipity
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Café Serendipity 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 Café Serendipity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Caf Serendipity Holdings, you can compare the effects of market volatilities on NYSE Composite and Café Serendipity 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 Café Serendipity. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Café Serendipity.
Diversification Opportunities for NYSE Composite and Café Serendipity
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NYSE and Café is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Caf Serendipity Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caf Serendipity 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 Café Serendipity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Caf Serendipity Holdings has no effect on the direction of NYSE Composite i.e., NYSE Composite and Café Serendipity go up and down completely randomly.
Pair Corralation between NYSE Composite and Café Serendipity
Assuming the 90 days trading horizon NYSE Composite is expected to generate 2.87 times less return on investment than Café Serendipity. But when comparing it to its historical volatility, NYSE Composite is 35.21 times less risky than Café Serendipity. It trades about 0.14 of its potential returns per unit of risk. Caf Serendipity Holdings is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 0.10 in Caf Serendipity Holdings on August 30, 2024 and sell it today you would lose (0.08) from holding Caf Serendipity Holdings or give up 80.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.73% |
| Values | Daily Returns |
NYSE Composite vs. Caf Serendipity Holdings
Performance |
| Timeline |
NYSE Composite and Café Serendipity Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Caf Serendipity Holdings
Pair trading matchups for Café Serendipity
Pair Trading with NYSE Composite and Café Serendipity
The main advantage of trading using opposite NYSE Composite and Café Serendipity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Café Serendipity 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 Café Serendipity will offset losses from the drop in Café Serendipity's long position.| NYSE Composite vs. Delek Drilling | NYSE Composite vs. Helmerich and Payne | NYSE Composite vs. Waste Management | NYSE Composite vs. US Global Investors |
| Café Serendipity vs. China Jo Jo Drugstores | Café Serendipity vs. SunLink Health Systems | Café Serendipity vs. Leafly Holdings | Café Serendipity vs. PetMed Express |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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