Correlation Between NYSE Composite and Entergy Arkansas
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Entergy Arkansas 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 Entergy Arkansas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Entergy Arkansas LLC, you can compare the effects of market volatilities on NYSE Composite and Entergy Arkansas 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 Entergy Arkansas. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Entergy Arkansas.
Diversification Opportunities for NYSE Composite and Entergy Arkansas
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between NYSE and Entergy is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Entergy Arkansas LLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Entergy Arkansas LLC 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 Entergy Arkansas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Entergy Arkansas LLC has no effect on the direction of NYSE Composite i.e., NYSE Composite and Entergy Arkansas go up and down completely randomly.
Pair Corralation between NYSE Composite and Entergy Arkansas
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.8 times more return on investment than Entergy Arkansas. However, NYSE Composite is 1.24 times less risky than Entergy Arkansas. It trades about 0.29 of its potential returns per unit of risk. Entergy Arkansas LLC is currently generating about -0.12 per unit of risk. If you would invest 1,941,627 in NYSE Composite on August 31, 2024 and sell it today you would earn a total of 79,355 from holding NYSE Composite or generate 4.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
NYSE Composite vs. Entergy Arkansas LLC
Performance |
| Timeline |
NYSE Composite and Entergy Arkansas Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Entergy Arkansas LLC
Pair trading matchups for Entergy Arkansas
Pair Trading with NYSE Composite and Entergy Arkansas
The main advantage of trading using opposite NYSE Composite and Entergy Arkansas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Entergy Arkansas 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 Entergy Arkansas will offset losses from the drop in Entergy Arkansas' long position.| NYSE Composite vs. Nextplat Corp | NYSE Composite vs. Qualys Inc | NYSE Composite vs. Cadence Design Systems | NYSE Composite vs. Asure Software |
| Entergy Arkansas vs. Entergy Mississippi LLC | Entergy Arkansas vs. Entergy New Orleans | Entergy Arkansas vs. Entergy Louisiana LLC | Entergy Arkansas vs. Southern Co |
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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