Correlation Between NYSE Composite and Cherry Hill
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Cherry Hill 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 Cherry Hill into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Cherry Hill Mortgage, you can compare the effects of market volatilities on NYSE Composite and Cherry Hill 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 Cherry Hill. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Cherry Hill.
Diversification Opportunities for NYSE Composite and Cherry Hill
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NYSE and Cherry is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Cherry Hill Mortgage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cherry Hill Mortgage 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 Cherry Hill. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cherry Hill Mortgage has no effect on the direction of NYSE Composite i.e., NYSE Composite and Cherry Hill go up and down completely randomly.
Pair Corralation between NYSE Composite and Cherry Hill
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.55 times more return on investment than Cherry Hill. However, NYSE Composite is 1.82 times less risky than Cherry Hill. It trades about 0.11 of its potential returns per unit of risk. Cherry Hill Mortgage is currently generating about 0.04 per unit of risk. If you would invest 1,594,248 in NYSE Composite on August 27, 2024 and sell it today you would earn a total of 418,097 from holding NYSE Composite or generate 26.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Cherry Hill Mortgage
Performance |
| Timeline |
NYSE Composite and Cherry Hill Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Cherry Hill Mortgage
Pair trading matchups for Cherry Hill
Pair Trading with NYSE Composite and Cherry Hill
The main advantage of trading using opposite NYSE Composite and Cherry Hill positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Cherry Hill 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 Cherry Hill will offset losses from the drop in Cherry Hill'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 |
| Cherry Hill vs. Chimera Investment | Cherry Hill vs. Chimera Investment | Cherry Hill vs. Chimera Investment | Cherry Hill vs. Invesco Mortgage Capital |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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