Correlation Between NYSE Composite and Coda Octopus
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Coda Octopus 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 Coda Octopus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Coda Octopus Group, you can compare the effects of market volatilities on NYSE Composite and Coda Octopus 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 Coda Octopus. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Coda Octopus.
Diversification Opportunities for NYSE Composite and Coda Octopus
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NYSE and Coda is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Coda Octopus Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coda Octopus Group 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 Coda Octopus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coda Octopus Group has no effect on the direction of NYSE Composite i.e., NYSE Composite and Coda Octopus go up and down completely randomly.
Pair Corralation between NYSE Composite and Coda Octopus
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.26 times more return on investment than Coda Octopus. However, NYSE Composite is 3.87 times less risky than Coda Octopus. It trades about 0.21 of its potential returns per unit of risk. Coda Octopus Group is currently generating about -0.01 per unit of risk. If you would invest 1,911,944 in NYSE Composite on October 21, 2024 and sell it today you would earn a total of 48,793 from holding NYSE Composite or generate 2.55% 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. Coda Octopus Group
Performance |
| Timeline |
NYSE Composite and Coda Octopus Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Coda Octopus Group
Pair trading matchups for Coda Octopus
Pair Trading with NYSE Composite and Coda Octopus
The main advantage of trading using opposite NYSE Composite and Coda Octopus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Coda Octopus 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 Coda Octopus will offset losses from the drop in Coda Octopus' long position.| NYSE Composite vs. National Health Investors | NYSE Composite vs. Arbor Realty Trust | NYSE Composite vs. Canaf Investments | NYSE Composite vs. Freedom Holding Corp |
| Coda Octopus vs. Ducommun Incorporated | Coda Octopus vs. Park Electrochemical | Coda Octopus vs. National Presto Industries | Coda Octopus vs. Astronics |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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