Correlation Between NYSE Composite and Consumer Goods
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Consumer Goods 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 Consumer Goods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Consumer Goods Ultrasector, you can compare the effects of market volatilities on NYSE Composite and Consumer Goods 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 Consumer Goods. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Consumer Goods.
Diversification Opportunities for NYSE Composite and Consumer Goods
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NYSE and Consumer is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Consumer Goods Ultrasector in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Consumer Goods Ultra 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 Consumer Goods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Consumer Goods Ultra has no effect on the direction of NYSE Composite i.e., NYSE Composite and Consumer Goods go up and down completely randomly.
Pair Corralation between NYSE Composite and Consumer Goods
Assuming the 90 days trading horizon NYSE Composite is expected to generate 1.05 times less return on investment than Consumer Goods. But when comparing it to its historical volatility, NYSE Composite is 1.43 times less risky than Consumer Goods. It trades about 0.14 of its potential returns per unit of risk. Consumer Goods Ultrasector is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 5,609 in Consumer Goods Ultrasector on September 4, 2024 and sell it today you would earn a total of 1,389 from holding Consumer Goods Ultrasector or generate 24.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
NYSE Composite vs. Consumer Goods Ultrasector
Performance |
| Timeline |
NYSE Composite and Consumer Goods Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Consumer Goods Ultrasector
Pair trading matchups for Consumer Goods
Pair Trading with NYSE Composite and Consumer Goods
The main advantage of trading using opposite NYSE Composite and Consumer Goods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Consumer Goods 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 Consumer Goods will offset losses from the drop in Consumer Goods' long position.| NYSE Composite vs. Kite Realty Group | NYSE Composite vs. Tradeweb Markets | NYSE Composite vs. Meiwu Technology Co | NYSE Composite vs. Uber Technologies |
| Consumer Goods vs. Consumer Goods Ultrasector | Consumer Goods vs. Consumer Services Ultrasector | Consumer Goods vs. Ultramid Cap Profund Ultramid Cap | Consumer Goods vs. Internet Ultrasector Profund |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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