Correlation Between NYSE Composite and COFI
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and COFI 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 COFI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and COFI, you can compare the effects of market volatilities on NYSE Composite and COFI 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 COFI. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and COFI.
Diversification Opportunities for NYSE Composite and COFI
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NYSE and COFI is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and COFI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COFI 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 COFI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COFI has no effect on the direction of NYSE Composite i.e., NYSE Composite and COFI go up and down completely randomly.
Pair Corralation between NYSE Composite and COFI
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.05 times more return on investment than COFI. However, NYSE Composite is 21.02 times less risky than COFI. It trades about -0.02 of its potential returns per unit of risk. COFI is currently generating about -0.16 per unit of risk. If you would invest 1,998,000 in NYSE Composite on November 28, 2024 and sell it today you would lose (4,715) from holding NYSE Composite or give up 0.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
NYSE Composite vs. COFI
Performance |
| Timeline |
NYSE Composite and COFI Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
COFI
Pair trading matchups for COFI
Pair Trading with NYSE Composite and COFI
The main advantage of trading using opposite NYSE Composite and COFI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, COFI 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 COFI will offset losses from the drop in COFI's long position.| NYSE Composite vs. Inter Parfums | NYSE Composite vs. Amkor Technology | NYSE Composite vs. Unilever PLC ADR | NYSE Composite vs. Estee Lauder Companies |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data |