Correlation Between NYSE Composite and Conestoga Micro
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Conestoga Micro 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 Conestoga Micro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Conestoga Micro Cap, you can compare the effects of market volatilities on NYSE Composite and Conestoga Micro 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 Conestoga Micro. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Conestoga Micro.
Diversification Opportunities for NYSE Composite and Conestoga Micro
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NYSE and Conestoga is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Conestoga Micro Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Conestoga Micro Cap 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 Conestoga Micro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Conestoga Micro Cap has no effect on the direction of NYSE Composite i.e., NYSE Composite and Conestoga Micro go up and down completely randomly.
Pair Corralation between NYSE Composite and Conestoga Micro
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.49 times more return on investment than Conestoga Micro. However, NYSE Composite is 2.03 times less risky than Conestoga Micro. It trades about 0.08 of its potential returns per unit of risk. Conestoga Micro Cap is currently generating about 0.02 per unit of risk. If you would invest 1,549,498 in NYSE Composite on September 4, 2024 and sell it today you would earn a total of 471,824 from holding NYSE Composite or generate 30.45% 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. Conestoga Micro Cap
Performance |
| Timeline |
NYSE Composite and Conestoga Micro Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Conestoga Micro Cap
Pair trading matchups for Conestoga Micro
Pair Trading with NYSE Composite and Conestoga Micro
The main advantage of trading using opposite NYSE Composite and Conestoga Micro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Conestoga Micro 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 Conestoga Micro will offset losses from the drop in Conestoga Micro's long position.| NYSE Composite vs. Kite Realty Group | NYSE Composite vs. Tradeweb Markets | NYSE Composite vs. Meiwu Technology Co | NYSE Composite vs. Uber Technologies |
| Conestoga Micro vs. Conestoga Small Cap | Conestoga Micro vs. Conestoga Smid Cap | Conestoga Micro vs. Amg Timessquare Mid | Conestoga Micro vs. T Rowe Price |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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