Correlation Between NYSE Composite and Capital Group
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Capital Group 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 Capital Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Capital Group Fixed, you can compare the effects of market volatilities on NYSE Composite and Capital Group 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 Capital Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Capital Group.
Diversification Opportunities for NYSE Composite and Capital Group
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NYSE and Capital is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Capital Group Fixed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital Group Fixed 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 Capital Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital Group Fixed has no effect on the direction of NYSE Composite i.e., NYSE Composite and Capital Group go up and down completely randomly.
Pair Corralation between NYSE Composite and Capital Group
Assuming the 90 days trading horizon NYSE Composite is expected to generate 1.58 times more return on investment than Capital Group. However, NYSE Composite is 1.58 times more volatile than Capital Group Fixed. It trades about 0.42 of its potential returns per unit of risk. Capital Group Fixed is currently generating about 0.1 per unit of risk. If you would invest 1,923,895 in NYSE Composite on September 1, 2024 and sell it today you would earn a total of 103,309 from holding NYSE Composite or generate 5.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
NYSE Composite vs. Capital Group Fixed
Performance |
| Timeline |
NYSE Composite and Capital Group Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Capital Group Fixed
Pair trading matchups for Capital Group
Pair Trading with NYSE Composite and Capital Group
The main advantage of trading using opposite NYSE Composite and Capital Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Capital Group 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 Capital Group will offset losses from the drop in Capital Group's long position.| NYSE Composite vs. Acumen Pharmaceuticals | NYSE Composite vs. Mind Medicine | NYSE Composite vs. NL Industries | NYSE Composite vs. Ecovyst |
| Capital Group vs. Valued Advisers Trust | Capital Group vs. Columbia Diversified Fixed | Capital Group vs. Principal Exchange Traded Funds | Capital Group vs. Doubleline Etf Trust |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |