Correlation Between NYSE Composite and FlexShopper
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and FlexShopper 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 FlexShopper into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and FlexShopper, you can compare the effects of market volatilities on NYSE Composite and FlexShopper 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 FlexShopper. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and FlexShopper.
Diversification Opportunities for NYSE Composite and FlexShopper
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NYSE and FlexShopper is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and FlexShopper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FlexShopper 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 FlexShopper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FlexShopper has no effect on the direction of NYSE Composite i.e., NYSE Composite and FlexShopper go up and down completely randomly.
Pair Corralation between NYSE Composite and FlexShopper
Assuming the 90 days trading horizon NYSE Composite is expected to generate 3.72 times less return on investment than FlexShopper. But when comparing it to its historical volatility, NYSE Composite is 6.65 times less risky than FlexShopper. It trades about 0.08 of its potential returns per unit of risk. FlexShopper is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 103.00 in FlexShopper on August 30, 2024 and sell it today you would earn a total of 66.00 from holding FlexShopper or generate 64.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. FlexShopper
Performance |
| Timeline |
NYSE Composite and FlexShopper Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
FlexShopper
Pair trading matchups for FlexShopper
Pair Trading with NYSE Composite and FlexShopper
The main advantage of trading using opposite NYSE Composite and FlexShopper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, FlexShopper 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 FlexShopper will offset losses from the drop in FlexShopper's long position.| NYSE Composite vs. Delek Drilling | NYSE Composite vs. Helmerich and Payne | NYSE Composite vs. Waste Management | NYSE Composite vs. US Global Investors |
| FlexShopper vs. AZN Capital Corp | FlexShopper vs. Fortress Transportation and | FlexShopper vs. Ashtead Gro | FlexShopper vs. Alta Equipment Group |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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