Correlation Between NYSE Composite and Coastal Capital
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Coastal Capital 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 Coastal Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Coastal Capital Acq, you can compare the effects of market volatilities on NYSE Composite and Coastal Capital 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 Coastal Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Coastal Capital.
Diversification Opportunities for NYSE Composite and Coastal Capital
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NYSE and Coastal is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Coastal Capital Acq in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coastal Capital Acq 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 Coastal Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coastal Capital Acq has no effect on the direction of NYSE Composite i.e., NYSE Composite and Coastal Capital go up and down completely randomly.
Pair Corralation between NYSE Composite and Coastal Capital
Assuming the 90 days trading horizon NYSE Composite is expected to generate 4.92 times less return on investment than Coastal Capital. But when comparing it to its historical volatility, NYSE Composite is 27.39 times less risky than Coastal Capital. It trades about 0.27 of its potential returns per unit of risk. Coastal Capital Acq is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 0.08 in Coastal Capital Acq on August 30, 2024 and sell it today you would lose (0.01) from holding Coastal Capital Acq or give up 12.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Coastal Capital Acq
Performance |
| Timeline |
NYSE Composite and Coastal Capital Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Coastal Capital Acq
Pair trading matchups for Coastal Capital
Pair Trading with NYSE Composite and Coastal Capital
The main advantage of trading using opposite NYSE Composite and Coastal Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Coastal Capital 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 Coastal Capital will offset losses from the drop in Coastal Capital's long position.| NYSE Composite vs. Sphere Entertainment Co | NYSE Composite vs. Weibo Corp | NYSE Composite vs. BCE Inc | NYSE Composite vs. Pinterest |
| Coastal Capital vs. LiveChain | Coastal Capital vs. CLST Holdings | Coastal Capital vs. Premier Products Group | Coastal Capital vs. Jadeart Group |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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