Correlation Between NYSE Composite and Frost Low
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Frost Low 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 Low 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 Low Duration, you can compare the effects of market volatilities on NYSE Composite and Frost Low 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 Low. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Frost Low.
Diversification Opportunities for NYSE Composite and Frost Low
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NYSE and Frost is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Frost Low Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Frost Low Duration 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 Low. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Frost Low Duration has no effect on the direction of NYSE Composite i.e., NYSE Composite and Frost Low go up and down completely randomly.
Pair Corralation between NYSE Composite and Frost Low
Assuming the 90 days trading horizon NYSE Composite is expected to generate 4.24 times more return on investment than Frost Low. However, NYSE Composite is 4.24 times more volatile than Frost Low Duration. It trades about 0.43 of its potential returns per unit of risk. Frost Low Duration is currently generating about 0.04 per unit of risk. If you would invest 1,924,339 in NYSE Composite on September 3, 2024 and sell it today you would earn a total of 102,865 from holding NYSE Composite or generate 5.35% 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 Low Duration
Performance |
| Timeline |
NYSE Composite and Frost Low Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Frost Low Duration
Pair trading matchups for Frost Low
Pair Trading with NYSE Composite and Frost Low
The main advantage of trading using opposite NYSE Composite and Frost Low positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Frost Low 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 Low will offset losses from the drop in Frost Low's long position.| NYSE Composite vs. Lindblad Expeditions Holdings | NYSE Composite vs. LB Foster | NYSE Composite vs. HUTCHMED DRC | NYSE Composite vs. Bridgford Foods |
| Frost Low vs. Calvert Global Energy | Frost Low vs. Firsthand Alternative Energy | Frost Low vs. Hennessy Bp Energy | Frost Low vs. Adams Natural Resources |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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