Correlation Between NYSE Composite and Crown LNG
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Crown LNG 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 Crown LNG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Crown LNG Holdings, you can compare the effects of market volatilities on NYSE Composite and Crown LNG 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 Crown LNG. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Crown LNG.
Diversification Opportunities for NYSE Composite and Crown LNG
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NYSE and Crown is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Crown LNG Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crown LNG Holdings 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 Crown LNG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crown LNG Holdings has no effect on the direction of NYSE Composite i.e., NYSE Composite and Crown LNG go up and down completely randomly.
Pair Corralation between NYSE Composite and Crown LNG
Assuming the 90 days trading horizon NYSE Composite is expected to generate 48.53 times less return on investment than Crown LNG. But when comparing it to its historical volatility, NYSE Composite is 53.73 times less risky than Crown LNG. It trades about 0.11 of its potential returns per unit of risk. Crown LNG Holdings is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 3.75 in Crown LNG Holdings on August 31, 2024 and sell it today you would lose (1.43) from holding Crown LNG Holdings or give up 38.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 27.54% |
| Values | Daily Returns |
NYSE Composite vs. Crown LNG Holdings
Performance |
| Timeline |
NYSE Composite and Crown LNG Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Crown LNG Holdings
Pair trading matchups for Crown LNG
Pair Trading with NYSE Composite and Crown LNG
The main advantage of trading using opposite NYSE Composite and Crown LNG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Crown LNG 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 Crown LNG will offset losses from the drop in Crown LNG's long position.| NYSE Composite vs. Nextplat Corp | NYSE Composite vs. Qualys Inc | NYSE Composite vs. Cadence Design Systems | NYSE Composite vs. Asure Software |
| Crown LNG vs. Eni SpA ADR | Crown LNG vs. BP PLC ADR | Crown LNG vs. Ecopetrol SA ADR | Crown LNG vs. Suncor Energy |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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