Correlation Between NYSE Composite and Chewy
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Chewy 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 Chewy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Chewy Inc, you can compare the effects of market volatilities on NYSE Composite and Chewy 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 Chewy. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Chewy.
Diversification Opportunities for NYSE Composite and Chewy
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NYSE and Chewy is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Chewy Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chewy Inc 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 Chewy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chewy Inc has no effect on the direction of NYSE Composite i.e., NYSE Composite and Chewy go up and down completely randomly.
Pair Corralation between NYSE Composite and Chewy
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.2 times more return on investment than Chewy. However, NYSE Composite is 4.95 times less risky than Chewy. It trades about 0.07 of its potential returns per unit of risk. Chewy Inc is currently generating about 0.01 per unit of risk. If you would invest 1,547,479 in NYSE Composite on August 24, 2024 and sell it today you would earn a total of 449,351 from holding NYSE Composite or generate 29.04% 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. Chewy Inc
Performance |
| Timeline |
NYSE Composite and Chewy Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Chewy Inc
Pair trading matchups for Chewy
Pair Trading with NYSE Composite and Chewy
The main advantage of trading using opposite NYSE Composite and Chewy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Chewy 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 Chewy will offset losses from the drop in Chewy's long position.| NYSE Composite vs. Awilco Drilling PLC | NYSE Composite vs. AKITA Drilling | NYSE Composite vs. SunOpta | NYSE Composite vs. Delek Drilling |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |