Correlation Between NYSE Composite and Emerald Insights
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Emerald Insights 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 Emerald Insights into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Emerald Insights Fund, you can compare the effects of market volatilities on NYSE Composite and Emerald Insights 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 Emerald Insights. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Emerald Insights.
Diversification Opportunities for NYSE Composite and Emerald Insights
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between NYSE and Emerald is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Emerald Insights Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emerald Insights 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 Emerald Insights. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emerald Insights has no effect on the direction of NYSE Composite i.e., NYSE Composite and Emerald Insights go up and down completely randomly.
Pair Corralation between NYSE Composite and Emerald Insights
Assuming the 90 days trading horizon NYSE Composite is expected to generate 1.26 times less return on investment than Emerald Insights. But when comparing it to its historical volatility, NYSE Composite is 1.82 times less risky than Emerald Insights. It trades about 0.42 of its potential returns per unit of risk. Emerald Insights Fund is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 2,099 in Emerald Insights Fund on September 1, 2024 and sell it today you would earn a total of 148.00 from holding Emerald Insights Fund or generate 7.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
NYSE Composite vs. Emerald Insights Fund
Performance |
| Timeline |
NYSE Composite and Emerald Insights Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Emerald Insights Fund
Pair trading matchups for Emerald Insights
Pair Trading with NYSE Composite and Emerald Insights
The main advantage of trading using opposite NYSE Composite and Emerald Insights positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Emerald Insights 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 Emerald Insights will offset losses from the drop in Emerald Insights' long position.| NYSE Composite vs. Acumen Pharmaceuticals | NYSE Composite vs. Mind Medicine | NYSE Composite vs. NL Industries | NYSE Composite vs. Ecovyst |
| Emerald Insights vs. Emerald Banking And | Emerald Insights vs. Emerald Growth Fund | Emerald Insights vs. Emerald Growth Fund | Emerald Insights vs. Emerald Insights Fund |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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