Correlation Between NYSE Composite and China Marine
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and China Marine 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 China Marine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and China Marine Food, you can compare the effects of market volatilities on NYSE Composite and China Marine 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 China Marine. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and China Marine.
Diversification Opportunities for NYSE Composite and China Marine
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between NYSE and China is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and China Marine Food in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Marine Food 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 China Marine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Marine Food has no effect on the direction of NYSE Composite i.e., NYSE Composite and China Marine go up and down completely randomly.
Pair Corralation between NYSE Composite and China Marine
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.09 times more return on investment than China Marine. However, NYSE Composite is 11.38 times less risky than China Marine. It trades about 0.08 of its potential returns per unit of risk. China Marine Food is currently generating about -0.11 per unit of risk. If you would invest 1,546,867 in NYSE Composite on September 2, 2024 and sell it today you would earn a total of 480,337 from holding NYSE Composite or generate 31.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 30.85% |
| Values | Daily Returns |
NYSE Composite vs. China Marine Food
Performance |
| Timeline |
NYSE Composite and China Marine Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
China Marine Food
Pair trading matchups for China Marine
Pair Trading with NYSE Composite and China Marine
The main advantage of trading using opposite NYSE Composite and China Marine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, China Marine 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 China Marine will offset losses from the drop in China Marine's long position.| NYSE Composite vs. Simon Property Group | NYSE Composite vs. Merit Medical Systems | NYSE Composite vs. Catalent | NYSE Composite vs. Titan Machinery |
| China Marine vs. General Mills | China Marine vs. Nestle SA | China Marine vs. Kellanova | China Marine vs. Campbell Soup |
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.
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