Correlation Between NYSE Composite and Cm Commodity
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Cm Commodity 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 Cm Commodity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Cm Modity Index, you can compare the effects of market volatilities on NYSE Composite and Cm Commodity 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 Cm Commodity. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Cm Commodity.
Diversification Opportunities for NYSE Composite and Cm Commodity
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NYSE and CMCAX is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Cm Modity Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cm Modity Index 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 Cm Commodity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cm Modity Index has no effect on the direction of NYSE Composite i.e., NYSE Composite and Cm Commodity go up and down completely randomly.
Pair Corralation between NYSE Composite and Cm Commodity
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.97 times more return on investment than Cm Commodity. However, NYSE Composite is 1.03 times less risky than Cm Commodity. It trades about 0.12 of its potential returns per unit of risk. Cm Modity Index is currently generating about 0.03 per unit of risk. If you would invest 1,685,289 in NYSE Composite on August 25, 2024 and sell it today you would earn a total of 327,056 from holding NYSE Composite or generate 19.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Cm Modity Index
Performance |
| Timeline |
NYSE Composite and Cm Commodity Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Cm Modity Index
Pair trading matchups for Cm Commodity
Pair Trading with NYSE Composite and Cm Commodity
The main advantage of trading using opposite NYSE Composite and Cm Commodity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Cm Commodity 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 Cm Commodity will offset losses from the drop in Cm Commodity's long position.| NYSE Composite vs. Glacier Bancorp | NYSE Composite vs. LithiumBank Resources Corp | NYSE Composite vs. Stepstone Group | NYSE Composite vs. Pintec Technology Holdings |
| Cm Commodity vs. Unconstrained Emerging Markets | Cm Commodity vs. Unconstrained Emerging Markets | Cm Commodity vs. Unconstrained Emerging Markets | Cm Commodity vs. Emerging Markets Fund |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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