Correlation Between NYSE Composite and FTX Token
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and FTX Token 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 FTX Token into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and FTX Token, you can compare the effects of market volatilities on NYSE Composite and FTX Token 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 FTX Token. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and FTX Token.
Diversification Opportunities for NYSE Composite and FTX Token
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NYSE and FTX is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and FTX Token in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FTX Token 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 FTX Token. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FTX Token has no effect on the direction of NYSE Composite i.e., NYSE Composite and FTX Token go up and down completely randomly.
Pair Corralation between NYSE Composite and FTX Token
Assuming the 90 days trading horizon NYSE Composite is expected to generate 7.68 times less return on investment than FTX Token. But when comparing it to its historical volatility, NYSE Composite is 10.98 times less risky than FTX Token. It trades about 0.29 of its potential returns per unit of risk. FTX Token is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 173.00 in FTX Token on August 31, 2024 and sell it today you would earn a total of 51.00 from holding FTX Token or generate 29.48% 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. FTX Token
Performance |
| Timeline |
NYSE Composite and FTX Token Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
FTX Token
Pair trading matchups for FTX Token
Pair Trading with NYSE Composite and FTX Token
The main advantage of trading using opposite NYSE Composite and FTX Token positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, FTX Token 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 FTX Token will offset losses from the drop in FTX Token's long position.| NYSE Composite vs. Nextplat Corp | NYSE Composite vs. Qualys Inc | NYSE Composite vs. Cadence Design Systems | NYSE Composite vs. Asure Software |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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