Correlation Between NYSE Composite and China Power
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and China Power 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 China Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and China Power International, you can compare the effects of market volatilities on NYSE Composite and China Power 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 China Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and China Power.
Diversification Opportunities for NYSE Composite and China Power
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between NYSE and China is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and China Power International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Power International 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 China Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Power International has no effect on the direction of NYSE Composite i.e., NYSE Composite and China Power go up and down completely randomly.
Pair Corralation between NYSE Composite and China Power
If you would invest 1,954,967 in NYSE Composite on August 27, 2024 and sell it today you would earn a total of 57,378 from holding NYSE Composite or generate 2.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
NYSE Composite vs. China Power International
Performance |
| Timeline |
NYSE Composite and China Power Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
China Power International
Pair trading matchups for China Power
Pair Trading with NYSE Composite and China Power
The main advantage of trading using opposite NYSE Composite and China Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, China Power 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 China Power will offset losses from the drop in China Power's long position.| NYSE Composite vs. Hooker Furniture | NYSE Composite vs. Hudson Pacific Properties | NYSE Composite vs. Canlan Ice Sports | NYSE Composite vs. Boston Properties |
| China Power vs. Southern Company | China Power vs. Edison International | China Power vs. American Electric Power | China Power vs. Duke Energy |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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