Correlation Between NYSE Composite and Forge Global
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Forge Global 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 Forge Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Forge Global Holdings, you can compare the effects of market volatilities on NYSE Composite and Forge Global 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 Forge Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Forge Global.
Diversification Opportunities for NYSE Composite and Forge Global
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NYSE and Forge is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Forge Global Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Forge Global Holdings 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 Forge Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Forge Global Holdings has no effect on the direction of NYSE Composite i.e., NYSE Composite and Forge Global go up and down completely randomly.
Pair Corralation between NYSE Composite and Forge Global
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.09 times more return on investment than Forge Global. However, NYSE Composite is 10.69 times less risky than Forge Global. It trades about 0.24 of its potential returns per unit of risk. Forge Global Holdings is currently generating about -0.07 per unit of risk. If you would invest 1,954,967 in NYSE Composite on August 28, 2024 and sell it today you would earn a total of 67,069 from holding NYSE Composite or generate 3.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Forge Global Holdings
Performance |
| Timeline |
NYSE Composite and Forge Global Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Forge Global Holdings
Pair trading matchups for Forge Global
Pair Trading with NYSE Composite and Forge Global
The main advantage of trading using opposite NYSE Composite and Forge Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Forge Global 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 Forge Global will offset losses from the drop in Forge Global's long position.| NYSE Composite vs. Hooker Furniture | NYSE Composite vs. Hudson Pacific Properties | NYSE Composite vs. Canlan Ice Sports | NYSE Composite vs. Boston Properties |
| Forge Global vs. Clearwater Analytics Holdings | Forge Global vs. Expensify | Forge Global vs. Envestnet | Forge Global vs. CS Disco LLC |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |