Correlation Between NYSE Composite and Cardlytics
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Cardlytics 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 Cardlytics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Cardlytics, you can compare the effects of market volatilities on NYSE Composite and Cardlytics 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 Cardlytics. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Cardlytics.
Diversification Opportunities for NYSE Composite and Cardlytics
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between NYSE and Cardlytics is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Cardlytics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cardlytics 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 Cardlytics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cardlytics has no effect on the direction of NYSE Composite i.e., NYSE Composite and Cardlytics go up and down completely randomly.
Pair Corralation between NYSE Composite and Cardlytics
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.18 times more return on investment than Cardlytics. However, NYSE Composite is 5.48 times less risky than Cardlytics. It trades about -0.06 of its potential returns per unit of risk. Cardlytics is currently generating about -0.1 per unit of risk. If you would invest 1,996,830 in NYSE Composite on October 22, 2024 and sell it today you would lose (36,093) from holding NYSE Composite or give up 1.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 97.5% |
| Values | Daily Returns |
NYSE Composite vs. Cardlytics
Performance |
| Timeline |
NYSE Composite and Cardlytics Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Cardlytics
Pair trading matchups for Cardlytics
Pair Trading with NYSE Composite and Cardlytics
The main advantage of trading using opposite NYSE Composite and Cardlytics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Cardlytics 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 Cardlytics will offset losses from the drop in Cardlytics' long position.| NYSE Composite vs. Kenon Holdings | NYSE Composite vs. Procter Gamble | NYSE Composite vs. Broadcom | NYSE Composite vs. Nike Inc |
| Cardlytics vs. Criteo Sa | Cardlytics vs. Deluxe | Cardlytics vs. Emerald Expositions Events | Cardlytics vs. Marchex |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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