Correlation Between NYSE Composite and Exro Technologies
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Exro Technologies 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 Exro Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Exro Technologies, you can compare the effects of market volatilities on NYSE Composite and Exro Technologies 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 Exro Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Exro Technologies.
Diversification Opportunities for NYSE Composite and Exro Technologies
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NYSE and Exro is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Exro Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exro Technologies 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 Exro Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exro Technologies has no effect on the direction of NYSE Composite i.e., NYSE Composite and Exro Technologies go up and down completely randomly.
Pair Corralation between NYSE Composite and Exro Technologies
Assuming the 90 days trading horizon NYSE Composite is expected to generate 6.9 times less return on investment than Exro Technologies. But when comparing it to its historical volatility, NYSE Composite is 17.98 times less risky than Exro Technologies. It trades about 0.24 of its potential returns per unit of risk. Exro Technologies is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 10.00 in Exro Technologies on August 27, 2024 and sell it today you would earn a total of 1.00 from holding Exro Technologies or generate 10.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Exro Technologies
Performance |
| Timeline |
NYSE Composite and Exro Technologies Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Exro Technologies
Pair trading matchups for Exro Technologies
Pair Trading with NYSE Composite and Exro Technologies
The main advantage of trading using opposite NYSE Composite and Exro Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Exro Technologies 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 Exro Technologies will offset losses from the drop in Exro Technologies' long position.| NYSE Composite vs. Hooker Furniture | NYSE Composite vs. Hudson Pacific Properties | NYSE Composite vs. Canlan Ice Sports | NYSE Composite vs. Boston Properties |
| Exro Technologies vs. Novonix Ltd ADR | Exro Technologies vs. Magnis Energy Technologies | Exro Technologies vs. Ilika plc | Exro Technologies vs. FuelPositive Corp |
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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