Correlation Between NYSE Composite and Dynagas LNG
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Dynagas LNG 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 Dynagas LNG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Dynagas LNG Partners, you can compare the effects of market volatilities on NYSE Composite and Dynagas LNG 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 Dynagas LNG. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Dynagas LNG.
Diversification Opportunities for NYSE Composite and Dynagas LNG
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NYSE and Dynagas is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Dynagas LNG Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dynagas LNG Partners 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 Dynagas LNG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dynagas LNG Partners has no effect on the direction of NYSE Composite i.e., NYSE Composite and Dynagas LNG go up and down completely randomly.
Pair Corralation between NYSE Composite and Dynagas LNG
Assuming the 90 days trading horizon NYSE Composite is expected to generate 1.04 times more return on investment than Dynagas LNG. However, NYSE Composite is 1.04 times more volatile than Dynagas LNG Partners. It trades about 0.11 of its potential returns per unit of risk. Dynagas LNG Partners is currently generating about 0.07 per unit of risk. If you would invest 1,760,743 in NYSE Composite on August 27, 2024 and sell it today you would earn a total of 251,602 from holding NYSE Composite or generate 14.29% 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. Dynagas LNG Partners
Performance |
| Timeline |
NYSE Composite and Dynagas LNG Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Dynagas LNG Partners
Pair trading matchups for Dynagas LNG
Pair Trading with NYSE Composite and Dynagas LNG
The main advantage of trading using opposite NYSE Composite and Dynagas LNG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Dynagas LNG 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 Dynagas LNG will offset losses from the drop in Dynagas LNG's long position.| NYSE Composite vs. Grocery Outlet Holding | NYSE Composite vs. Tencent Music Entertainment | NYSE Composite vs. SunLink Health Systems | NYSE Composite vs. Getty Realty |
| Dynagas LNG vs. GasLog Partners LP | Dynagas LNG vs. Dynagas LNG Partners | Dynagas LNG vs. GasLog Partners LP | Dynagas LNG vs. GasLog Partners LP |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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