Correlation Between NYSE Composite and EFG International
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and EFG International 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 EFG International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and EFG International AG, you can compare the effects of market volatilities on NYSE Composite and EFG International 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 EFG International. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and EFG International.
Diversification Opportunities for NYSE Composite and EFG International
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between NYSE and EFG is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and EFG International AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EFG International 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 EFG International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EFG International has no effect on the direction of NYSE Composite i.e., NYSE Composite and EFG International go up and down completely randomly.
Pair Corralation between NYSE Composite and EFG International
Assuming the 90 days trading horizon NYSE Composite is expected to generate 3.51 times less return on investment than EFG International. But when comparing it to its historical volatility, NYSE Composite is 2.69 times less risky than EFG International. It trades about 0.07 of its potential returns per unit of risk. EFG International AG is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 733.00 in EFG International AG on September 20, 2024 and sell it today you would earn a total of 647.00 from holding EFG International AG or generate 88.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 85.45% |
| Values | Daily Returns |
NYSE Composite vs. EFG International AG
Performance |
| Timeline |
NYSE Composite and EFG International Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
EFG International AG
Pair trading matchups for EFG International
Pair Trading with NYSE Composite and EFG International
The main advantage of trading using opposite NYSE Composite and EFG International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, EFG International 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 EFG International will offset losses from the drop in EFG International's long position.| NYSE Composite vs. Relx PLC ADR | NYSE Composite vs. Century Aluminum | NYSE Composite vs. Udemy Inc | NYSE Composite vs. Blue Moon Metals |
| EFG International vs. Bank of America | EFG International vs. Citigroup | EFG International vs. JPMorgan Chase Co | EFG International vs. Wells Fargo |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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