Correlation Between NYSE Composite and Cadiz
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Cadiz 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 Cadiz into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Cadiz Inc, you can compare the effects of market volatilities on NYSE Composite and Cadiz 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 Cadiz. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Cadiz.
Diversification Opportunities for NYSE Composite and Cadiz
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between NYSE and Cadiz is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Cadiz Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cadiz Inc 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 Cadiz. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cadiz Inc has no effect on the direction of NYSE Composite i.e., NYSE Composite and Cadiz go up and down completely randomly.
Pair Corralation between NYSE Composite and Cadiz
Assuming the 90 days trading horizon NYSE Composite is expected to generate 3.96 times less return on investment than Cadiz. But when comparing it to its historical volatility, NYSE Composite is 6.77 times less risky than Cadiz. It trades about 0.24 of its potential returns per unit of risk. Cadiz Inc is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 311.00 in Cadiz Inc on August 28, 2024 and sell it today you would earn a total of 38.00 from holding Cadiz Inc or generate 12.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Cadiz Inc
Performance |
| Timeline |
NYSE Composite and Cadiz Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Cadiz Inc
Pair trading matchups for Cadiz
Pair Trading with NYSE Composite and Cadiz
The main advantage of trading using opposite NYSE Composite and Cadiz positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Cadiz 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 Cadiz will offset losses from the drop in Cadiz's long position.| NYSE Composite vs. Hooker Furniture | NYSE Composite vs. Hudson Pacific Properties | NYSE Composite vs. Canlan Ice Sports | NYSE Composite vs. Boston Properties |
| Cadiz vs. Middlesex Water | Cadiz vs. SJW Group Common | Cadiz vs. California Water Service | Cadiz vs. The York Water |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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