Correlation Between NYSE Composite and Cepton
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Cepton 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 Cepton into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Cepton Inc, you can compare the effects of market volatilities on NYSE Composite and Cepton 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 Cepton. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Cepton.
Diversification Opportunities for NYSE Composite and Cepton
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NYSE and Cepton is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Cepton Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cepton Inc 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 Cepton. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cepton Inc has no effect on the direction of NYSE Composite i.e., NYSE Composite and Cepton go up and down completely randomly.
Pair Corralation between NYSE Composite and Cepton
Assuming the 90 days trading horizon NYSE Composite is expected to generate 4.03 times less return on investment than Cepton. But when comparing it to its historical volatility, NYSE Composite is 21.85 times less risky than Cepton. It trades about 0.15 of its potential returns per unit of risk. Cepton Inc is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1.00 in Cepton Inc on August 28, 2024 and sell it today you would lose (0.26) from holding Cepton Inc or give up 26.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.44% |
| Values | Daily Returns |
NYSE Composite vs. Cepton Inc
Performance |
| Timeline |
NYSE Composite and Cepton Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Cepton Inc
Pair trading matchups for Cepton
Pair Trading with NYSE Composite and Cepton
The main advantage of trading using opposite NYSE Composite and Cepton positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Cepton 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 Cepton will offset losses from the drop in Cepton's long position.| NYSE Composite vs. Vita Coco | NYSE Composite vs. Franklin Wireless Corp | NYSE Composite vs. Ambev SA ADR | NYSE Composite vs. Toro Co |
| Cepton vs. Cepton Inc | Cepton vs. Thayer Ventures Acquisition | Cepton vs. Anghami Warrants | Cepton vs. Inspirato |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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