Correlation Between NYSE Composite and Ngx Energy
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Ngx Energy 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 Ngx Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Ngx Energy International, you can compare the effects of market volatilities on NYSE Composite and Ngx Energy 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 Ngx Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Ngx Energy.
Diversification Opportunities for NYSE Composite and Ngx Energy
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NYSE and Ngx is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Ngx Energy International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ngx Energy International 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 Ngx Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ngx Energy International has no effect on the direction of NYSE Composite i.e., NYSE Composite and Ngx Energy go up and down completely randomly.
Pair Corralation between NYSE Composite and Ngx Energy
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.26 times more return on investment than Ngx Energy. However, NYSE Composite is 3.89 times less risky than Ngx Energy. It trades about 0.28 of its potential returns per unit of risk. Ngx Energy International is currently generating about 0.06 per unit of risk. If you would invest 1,920,711 in NYSE Composite on October 24, 2024 and sell it today you would earn a total of 68,648 from holding NYSE Composite or generate 3.57% 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. Ngx Energy International
Performance |
| Timeline |
NYSE Composite and Ngx Energy Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Ngx Energy International
Pair trading matchups for Ngx Energy
Pair Trading with NYSE Composite and Ngx Energy
The main advantage of trading using opposite NYSE Composite and Ngx Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Ngx Energy 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 Ngx Energy will offset losses from the drop in Ngx Energy's long position.| NYSE Composite vs. Datadog | NYSE Composite vs. Nasdaq Inc | NYSE Composite vs. Air Lease | NYSE Composite vs. EvoAir Holdings |
| Ngx Energy vs. Trillion Energy International | Ngx Energy vs. Bengal Energy | Ngx Energy vs. ROK Resources | Ngx Energy vs. Pieridae Energy Limited |
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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