Correlation Between NYSE Composite and PhenomeX
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and PhenomeX 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 PhenomeX into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and PhenomeX, you can compare the effects of market volatilities on NYSE Composite and PhenomeX 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 PhenomeX. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and PhenomeX.
Diversification Opportunities for NYSE Composite and PhenomeX
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between NYSE and PhenomeX is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and PhenomeX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PhenomeX 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 PhenomeX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PhenomeX has no effect on the direction of NYSE Composite i.e., NYSE Composite and PhenomeX go up and down completely randomly.
Pair Corralation between NYSE Composite and PhenomeX
Assuming the 90 days trading horizon NYSE Composite is expected to generate 5.17 times less return on investment than PhenomeX. But when comparing it to its historical volatility, NYSE Composite is 7.12 times less risky than PhenomeX. It trades about 0.11 of its potential returns per unit of risk. PhenomeX is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 55.00 in PhenomeX on August 31, 2024 and sell it today you would earn a total of 5.00 from holding PhenomeX or generate 9.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 8.56% |
| Values | Daily Returns |
NYSE Composite vs. PhenomeX
Performance |
| Timeline |
NYSE Composite and PhenomeX Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
PhenomeX
Pair trading matchups for PhenomeX
Pair Trading with NYSE Composite and PhenomeX
The main advantage of trading using opposite NYSE Composite and PhenomeX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, PhenomeX 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 PhenomeX will offset losses from the drop in PhenomeX's long position.| NYSE Composite vs. Nextplat Corp | NYSE Composite vs. Qualys Inc | NYSE Composite vs. Cadence Design Systems | NYSE Composite vs. Asure Software |
| PhenomeX vs. Sapiens International | PhenomeX vs. Western Copper and | PhenomeX vs. Flexible Solutions International | PhenomeX vs. Paysafe |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Stocks Directory Find actively traded stocks across global markets | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |