Correlation Between NYSE Composite and Continental Beverage
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Continental Beverage 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 Continental Beverage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Continental Beverage Brands, you can compare the effects of market volatilities on NYSE Composite and Continental Beverage 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 Continental Beverage. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Continental Beverage.
Diversification Opportunities for NYSE Composite and Continental Beverage
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between NYSE and Continental is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Continental Beverage Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Continental Beverage 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 Continental Beverage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Continental Beverage has no effect on the direction of NYSE Composite i.e., NYSE Composite and Continental Beverage go up and down completely randomly.
Pair Corralation between NYSE Composite and Continental Beverage
Assuming the 90 days trading horizon NYSE Composite is expected to generate 497.49 times less return on investment than Continental Beverage. But when comparing it to its historical volatility, NYSE Composite is 246.46 times less risky than Continental Beverage. It trades about 0.08 of its potential returns per unit of risk. Continental Beverage Brands is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 15.00 in Continental Beverage Brands on August 31, 2024 and sell it today you would earn a total of 60.00 from holding Continental Beverage Brands or generate 400.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
NYSE Composite vs. Continental Beverage Brands
Performance |
| Timeline |
NYSE Composite and Continental Beverage Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Continental Beverage Brands
Pair trading matchups for Continental Beverage
Pair Trading with NYSE Composite and Continental Beverage
The main advantage of trading using opposite NYSE Composite and Continental Beverage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Continental Beverage 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 Continental Beverage will offset losses from the drop in Continental Beverage's long position.| NYSE Composite vs. Nextplat Corp | NYSE Composite vs. Qualys Inc | NYSE Composite vs. Cadence Design Systems | NYSE Composite vs. Asure Software |
| Continental Beverage vs. American Leisure Holdings | Continental Beverage vs. Absolute Health and | Continental Beverage vs. Supurva Healthcare Group | Continental Beverage vs. China Health Management |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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