Correlation Between NYSE Composite and First Wave
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and First Wave 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 First Wave into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and First Wave BioPharma, you can compare the effects of market volatilities on NYSE Composite and First Wave 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 First Wave. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and First Wave.
Diversification Opportunities for NYSE Composite and First Wave
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between NYSE and First is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and First Wave BioPharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Wave BioPharma 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 First Wave. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Wave BioPharma has no effect on the direction of NYSE Composite i.e., NYSE Composite and First Wave go up and down completely randomly.
Pair Corralation between NYSE Composite and First Wave
If you would invest 1,954,967 in NYSE Composite on August 29, 2024 and sell it today you would earn a total of 66,978 from holding NYSE Composite or generate 3.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 4.55% |
| Values | Daily Returns |
NYSE Composite vs. First Wave BioPharma
Performance |
| Timeline |
NYSE Composite and First Wave Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
First Wave BioPharma
Pair trading matchups for First Wave
Pair Trading with NYSE Composite and First Wave
The main advantage of trading using opposite NYSE Composite and First Wave positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, First Wave 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 First Wave will offset losses from the drop in First Wave's long position.| NYSE Composite vs. Vita Coco | NYSE Composite vs. Franklin Wireless Corp | NYSE Composite vs. Ambev SA ADR | NYSE Composite vs. Toro Co |
| First Wave vs. Quoin Pharmaceuticals Ltd | First Wave vs. Revelation Biosciences | First Wave vs. Dermata Therapeutics | First Wave vs. LMF Acquisition Opportunities |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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