Correlation Between NYSE Composite and Embark Commodity
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Embark Commodity 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 Embark Commodity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Embark Commodity Strategy, you can compare the effects of market volatilities on NYSE Composite and Embark Commodity 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 Embark Commodity. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Embark Commodity.
Diversification Opportunities for NYSE Composite and Embark Commodity
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NYSE and Embark is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Embark Commodity Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Embark Commodity Strategy 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 Embark Commodity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Embark Commodity Strategy has no effect on the direction of NYSE Composite i.e., NYSE Composite and Embark Commodity go up and down completely randomly.
Pair Corralation between NYSE Composite and Embark Commodity
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.9 times more return on investment than Embark Commodity. However, NYSE Composite is 1.11 times less risky than Embark Commodity. It trades about 0.14 of its potential returns per unit of risk. Embark Commodity Strategy is currently generating about 0.03 per unit of risk. If you would invest 1,627,444 in NYSE Composite on September 4, 2024 and sell it today you would earn a total of 393,878 from holding NYSE Composite or generate 24.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 87.45% |
| Values | Daily Returns |
NYSE Composite vs. Embark Commodity Strategy
Performance |
| Timeline |
NYSE Composite and Embark Commodity Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Embark Commodity Strategy
Pair trading matchups for Embark Commodity
Pair Trading with NYSE Composite and Embark Commodity
The main advantage of trading using opposite NYSE Composite and Embark Commodity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Embark Commodity 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 Embark Commodity will offset losses from the drop in Embark Commodity's long position.| NYSE Composite vs. Kite Realty Group | NYSE Composite vs. Tradeweb Markets | NYSE Composite vs. Meiwu Technology Co | NYSE Composite vs. Uber Technologies |
| Embark Commodity vs. Gabelli Gold Fund | Embark Commodity vs. Great West Goldman Sachs | Embark Commodity vs. Precious Metals And | Embark Commodity vs. Oppenheimer Gold Special |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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