Correlation Between NYSE Composite and Emergent Biosolutions
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Emergent Biosolutions 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 Emergent Biosolutions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Emergent Biosolutions, you can compare the effects of market volatilities on NYSE Composite and Emergent Biosolutions 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 Emergent Biosolutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Emergent Biosolutions.
Diversification Opportunities for NYSE Composite and Emergent Biosolutions
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NYSE and Emergent is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Emergent Biosolutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emergent Biosolutions 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 Emergent Biosolutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emergent Biosolutions has no effect on the direction of NYSE Composite i.e., NYSE Composite and Emergent Biosolutions go up and down completely randomly.
Pair Corralation between NYSE Composite and Emergent Biosolutions
Assuming the 90 days trading horizon NYSE Composite is expected to generate 2.34 times less return on investment than Emergent Biosolutions. But when comparing it to its historical volatility, NYSE Composite is 11.69 times less risky than Emergent Biosolutions. It trades about 0.24 of its potential returns per unit of risk. Emergent Biosolutions is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 967.00 in Emergent Biosolutions on August 28, 2024 and sell it today you would earn a total of 18.00 from holding Emergent Biosolutions or generate 1.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Emergent Biosolutions
Performance |
| Timeline |
NYSE Composite and Emergent Biosolutions Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Emergent Biosolutions
Pair trading matchups for Emergent Biosolutions
Pair Trading with NYSE Composite and Emergent Biosolutions
The main advantage of trading using opposite NYSE Composite and Emergent Biosolutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Emergent Biosolutions 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 Emergent Biosolutions will offset losses from the drop in Emergent Biosolutions' long position.| NYSE Composite vs. Hooker Furniture | NYSE Composite vs. Hudson Pacific Properties | NYSE Composite vs. Canlan Ice Sports | NYSE Composite vs. Boston Properties |
| Emergent Biosolutions vs. Zoetis Inc | Emergent Biosolutions vs. Bausch Health Companies | Emergent Biosolutions vs. Neurocrine Biosciences | Emergent Biosolutions vs. Akanda Corp |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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