Correlation Between NYSE Composite and Cowen
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Cowen 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 Cowen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Cowen Group, you can compare the effects of market volatilities on NYSE Composite and Cowen 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 Cowen. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Cowen.
Diversification Opportunities for NYSE Composite and Cowen
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NYSE and Cowen is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Cowen Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cowen 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 Cowen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cowen Group has no effect on the direction of NYSE Composite i.e., NYSE Composite and Cowen go up and down completely randomly.
Pair Corralation between NYSE Composite and Cowen
Assuming the 90 days trading horizon NYSE Composite is expected to generate 7.65 times more return on investment than Cowen. However, NYSE Composite is 7.65 times more volatile than Cowen Group. It trades about 0.08 of its potential returns per unit of risk. Cowen Group is currently generating about 0.28 per unit of risk. If you would invest 1,556,254 in NYSE Composite on September 3, 2024 and sell it today you would earn a total of 470,950 from holding NYSE Composite or generate 30.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 10.91% |
| Values | Daily Returns |
NYSE Composite vs. Cowen Group
Performance |
| Timeline |
NYSE Composite and Cowen Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Cowen Group
Pair trading matchups for Cowen
Pair Trading with NYSE Composite and Cowen
The main advantage of trading using opposite NYSE Composite and Cowen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Cowen 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 Cowen will offset losses from the drop in Cowen's long position.| NYSE Composite vs. Lindblad Expeditions Holdings | NYSE Composite vs. LB Foster | NYSE Composite vs. HUTCHMED DRC | NYSE Composite vs. Bridgford Foods |
| Cowen vs. Ihuman Inc | Cowen vs. Where Food Comes | Cowen vs. Cadence Design Systems | Cowen vs. Zane Interactive Publishing |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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