Correlation Between NYSE Composite and Frost Growth
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Frost Growth 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 Frost Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Frost Growth Equity, you can compare the effects of market volatilities on NYSE Composite and Frost Growth 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 Frost Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Frost Growth.
Diversification Opportunities for NYSE Composite and Frost Growth
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between NYSE and Frost is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Frost Growth Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Frost Growth Equity 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 Frost Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Frost Growth Equity has no effect on the direction of NYSE Composite i.e., NYSE Composite and Frost Growth go up and down completely randomly.
Pair Corralation between NYSE Composite and Frost Growth
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.15 times more return on investment than Frost Growth. However, NYSE Composite is 6.61 times less risky than Frost Growth. It trades about 0.42 of its potential returns per unit of risk. Frost Growth Equity is currently generating about -0.15 per unit of risk. If you would invest 1,923,895 in NYSE Composite on September 1, 2024 and sell it today you would earn a total of 103,309 from holding NYSE Composite or generate 5.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Frost Growth Equity
Performance |
| Timeline |
NYSE Composite and Frost Growth Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Frost Growth Equity
Pair trading matchups for Frost Growth
Pair Trading with NYSE Composite and Frost Growth
The main advantage of trading using opposite NYSE Composite and Frost Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Frost Growth 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 Frost Growth will offset losses from the drop in Frost Growth's long position.| NYSE Composite vs. Acumen Pharmaceuticals | NYSE Composite vs. Mind Medicine | NYSE Composite vs. NL Industries | NYSE Composite vs. Ecovyst |
| Frost Growth vs. T Rowe Price | Frost Growth vs. Tax Managed Large Cap | Frost Growth vs. Touchstone Large Cap | Frost Growth vs. T Rowe Price |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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