Correlation Between NYSE Composite and CF Acquisition
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and CF Acquisition 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 CF Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and CF Acquisition VII, you can compare the effects of market volatilities on NYSE Composite and CF Acquisition 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 CF Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and CF Acquisition.
Diversification Opportunities for NYSE Composite and CF Acquisition
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between NYSE and CFFSU is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and CF Acquisition VII in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CF Acquisition VII 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 CF Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CF Acquisition VII has no effect on the direction of NYSE Composite i.e., NYSE Composite and CF Acquisition go up and down completely randomly.
Pair Corralation between NYSE Composite and CF Acquisition
Assuming the 90 days trading horizon NYSE Composite is expected to generate 1.8 times more return on investment than CF Acquisition. However, NYSE Composite is 1.8 times more volatile than CF Acquisition VII. It trades about 0.07 of its potential returns per unit of risk. CF Acquisition VII is currently generating about 0.05 per unit of risk. If you would invest 1,605,225 in NYSE Composite on November 2, 2024 and sell it today you would earn a total of 394,657 from holding NYSE Composite or generate 24.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.75% |
| Values | Daily Returns |
NYSE Composite vs. CF Acquisition VII
Performance |
| Timeline |
NYSE Composite and CF Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Pair Trading with NYSE Composite and CF Acquisition
The main advantage of trading using opposite NYSE Composite and CF Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, CF Acquisition 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 CF Acquisition will offset losses from the drop in CF Acquisition's long position.| NYSE Composite vs. Palomar Holdings | NYSE Composite vs. The Peoples Insurance | NYSE Composite vs. Radian Group | NYSE Composite vs. Nascent Wine |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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