Correlation Between NYSE Composite and Eminent Gold
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Eminent Gold 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 Eminent Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Eminent Gold Corp, you can compare the effects of market volatilities on NYSE Composite and Eminent Gold 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 Eminent Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Eminent Gold.
Diversification Opportunities for NYSE Composite and Eminent Gold
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NYSE and Eminent is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Eminent Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eminent Gold Corp 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 Eminent Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eminent Gold Corp has no effect on the direction of NYSE Composite i.e., NYSE Composite and Eminent Gold go up and down completely randomly.
Pair Corralation between NYSE Composite and Eminent Gold
Assuming the 90 days trading horizon NYSE Composite is expected to under-perform the Eminent Gold. But the index apears to be less risky and, when comparing its historical volatility, NYSE Composite is 3.54 times less risky than Eminent Gold. The index trades about -0.05 of its potential returns per unit of risk. The Eminent Gold Corp is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 27.00 in Eminent Gold Corp on January 15, 2025 and sell it today you would lose (2.00) from holding Eminent Gold Corp or give up 7.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 96.92% |
| Values | Daily Returns |
NYSE Composite vs. Eminent Gold Corp
Performance |
| Timeline |
NYSE Composite and Eminent Gold Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Eminent Gold Corp
Pair trading matchups for Eminent Gold
Pair Trading with NYSE Composite and Eminent Gold
The main advantage of trading using opposite NYSE Composite and Eminent Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Eminent Gold 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 Eminent Gold will offset losses from the drop in Eminent Gold's long position.| NYSE Composite vs. Azul SA | NYSE Composite vs. Hudson Pacific Properties | NYSE Composite vs. Allegiant Travel | NYSE Composite vs. Ryanair Holdings PLC |
| Eminent Gold vs. Thunderstruck Resources | Eminent Gold vs. Aston Minerals | Eminent Gold vs. Tarku Resources | Eminent Gold vs. Murchison Minerals |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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