Correlation Between NYSE Composite and Curtiss Motorcycles
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Curtiss Motorcycles 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 Curtiss Motorcycles into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Curtiss Motorcycles, you can compare the effects of market volatilities on NYSE Composite and Curtiss Motorcycles 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 Curtiss Motorcycles. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Curtiss Motorcycles.
Diversification Opportunities for NYSE Composite and Curtiss Motorcycles
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NYSE and Curtiss is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Curtiss Motorcycles in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Curtiss Motorcycles 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 Curtiss Motorcycles. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Curtiss Motorcycles has no effect on the direction of NYSE Composite i.e., NYSE Composite and Curtiss Motorcycles go up and down completely randomly.
Pair Corralation between NYSE Composite and Curtiss Motorcycles
Assuming the 90 days trading horizon NYSE Composite is expected to generate 62.52 times less return on investment than Curtiss Motorcycles. But when comparing it to its historical volatility, NYSE Composite is 99.48 times less risky than Curtiss Motorcycles. It trades about 0.11 of its potential returns per unit of risk. Curtiss Motorcycles is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 13.00 in Curtiss Motorcycles on August 31, 2024 and sell it today you would lose (10.70) from holding Curtiss Motorcycles or give up 82.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.73% |
| Values | Daily Returns |
NYSE Composite vs. Curtiss Motorcycles
Performance |
| Timeline |
NYSE Composite and Curtiss Motorcycles Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Curtiss Motorcycles
Pair trading matchups for Curtiss Motorcycles
Pair Trading with NYSE Composite and Curtiss Motorcycles
The main advantage of trading using opposite NYSE Composite and Curtiss Motorcycles positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Curtiss Motorcycles 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 Curtiss Motorcycles will offset losses from the drop in Curtiss Motorcycles' long position.| NYSE Composite vs. Nextplat Corp | NYSE Composite vs. Qualys Inc | NYSE Composite vs. Cadence Design Systems | NYSE Composite vs. Asure Software |
| Curtiss Motorcycles vs. Life Electric Vehicles | Curtiss Motorcycles vs. Evil Empire Designs | Curtiss Motorcycles vs. Twin Vee Powercats | Curtiss Motorcycles vs. LCI Industries |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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