Correlation Between NYSE Composite and Fpa Crescent
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Fpa Crescent 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 Fpa Crescent into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Fpa Crescent, you can compare the effects of market volatilities on NYSE Composite and Fpa Crescent 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 Fpa Crescent. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Fpa Crescent.
Diversification Opportunities for NYSE Composite and Fpa Crescent
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between NYSE and Fpa is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Fpa Crescent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fpa Crescent 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 Fpa Crescent. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fpa Crescent has no effect on the direction of NYSE Composite i.e., NYSE Composite and Fpa Crescent go up and down completely randomly.
Pair Corralation between NYSE Composite and Fpa Crescent
Assuming the 90 days trading horizon NYSE Composite is expected to generate 1.25 times more return on investment than Fpa Crescent. However, NYSE Composite is 1.25 times more volatile than Fpa Crescent. It trades about 0.42 of its potential returns per unit of risk. Fpa Crescent is currently generating about 0.23 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 Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
NYSE Composite vs. Fpa Crescent
Performance |
| Timeline |
NYSE Composite and Fpa Crescent Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Fpa Crescent
Pair trading matchups for Fpa Crescent
Pair Trading with NYSE Composite and Fpa Crescent
The main advantage of trading using opposite NYSE Composite and Fpa Crescent positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Fpa Crescent 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 Fpa Crescent will offset losses from the drop in Fpa Crescent's long position.| NYSE Composite vs. Acumen Pharmaceuticals | NYSE Composite vs. Mind Medicine | NYSE Composite vs. NL Industries | NYSE Composite vs. Ecovyst |
| Fpa Crescent vs. Pimco Corporate Income | Fpa Crescent vs. Fpa Flexible Fixed | Fpa Crescent vs. Fpa Queens Road | Fpa Crescent vs. Fpa Queens Road |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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