Correlation Between NYSE Composite and Spectral Med
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Spectral Med 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 Spectral Med into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Spectral Med, you can compare the effects of market volatilities on NYSE Composite and Spectral Med 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 Spectral Med. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Spectral Med.
Diversification Opportunities for NYSE Composite and Spectral Med
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between NYSE and Spectral is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Spectral Med in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spectral Med 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 Spectral Med. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spectral Med has no effect on the direction of NYSE Composite i.e., NYSE Composite and Spectral Med go up and down completely randomly.
Pair Corralation between NYSE Composite and Spectral Med
Assuming the 90 days trading horizon NYSE Composite is expected to generate 8.15 times less return on investment than Spectral Med. But when comparing it to its historical volatility, NYSE Composite is 8.59 times less risky than Spectral Med. It trades about 0.28 of its potential returns per unit of risk. Spectral Med is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 32.00 in Spectral Med on October 24, 2024 and sell it today you would earn a total of 10.00 from holding Spectral Med or generate 31.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
NYSE Composite vs. Spectral Med
Performance |
| Timeline |
NYSE Composite and Spectral Med Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Spectral Med
Pair trading matchups for Spectral Med
Pair Trading with NYSE Composite and Spectral Med
The main advantage of trading using opposite NYSE Composite and Spectral Med positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Spectral Med 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 Spectral Med will offset losses from the drop in Spectral Med's long position.| NYSE Composite vs. Datadog | NYSE Composite vs. Nasdaq Inc | NYSE Composite vs. Air Lease | NYSE Composite vs. EvoAir Holdings |
| Spectral Med vs. Avricore Health | Spectral Med vs. bioAffinity Technologies, | Spectral Med vs. BioMark Diagnostics | Spectral Med vs. Mainz Biomed BV |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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