Correlation Between NYSE Composite and Chijet
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Chijet 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 Chijet into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Chijet Motor Company,, you can compare the effects of market volatilities on NYSE Composite and Chijet 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 Chijet. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Chijet.
Diversification Opportunities for NYSE Composite and Chijet
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NYSE and Chijet is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Chijet Motor Company, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chijet Motor , 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 Chijet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chijet Motor , has no effect on the direction of NYSE Composite i.e., NYSE Composite and Chijet go up and down completely randomly.
Pair Corralation between NYSE Composite and Chijet
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.07 times more return on investment than Chijet. However, NYSE Composite is 15.26 times less risky than Chijet. It trades about 0.14 of its potential returns per unit of risk. Chijet Motor Company, is currently generating about -0.05 per unit of risk. If you would invest 1,613,685 in NYSE Composite on September 2, 2024 and sell it today you would earn a total of 413,519 from holding NYSE Composite or generate 25.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Chijet Motor Company,
Performance |
| Timeline |
NYSE Composite and Chijet Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Chijet Motor Company,
Pair trading matchups for Chijet
Pair Trading with NYSE Composite and Chijet
The main advantage of trading using opposite NYSE Composite and Chijet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Chijet 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 Chijet will offset losses from the drop in Chijet's long position.| NYSE Composite vs. Simon Property Group | NYSE Composite vs. Merit Medical Systems | NYSE Composite vs. Catalent | NYSE Composite vs. Titan Machinery |
| Chijet vs. Franklin Street Properties | Chijet vs. United Homes Group | Chijet vs. Mid Atlantic Home Health | Chijet vs. Meli Hotels International |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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