Correlation Between NYSE Composite and Grupo Financiero
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Grupo Financiero 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 Grupo Financiero into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Grupo Financiero Banorte, you can compare the effects of market volatilities on NYSE Composite and Grupo Financiero 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 Grupo Financiero. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Grupo Financiero.
Diversification Opportunities for NYSE Composite and Grupo Financiero
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between NYSE and Grupo is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Grupo Financiero Banorte in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Financiero Banorte 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 Grupo Financiero. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Financiero Banorte has no effect on the direction of NYSE Composite i.e., NYSE Composite and Grupo Financiero go up and down completely randomly.
Pair Corralation between NYSE Composite and Grupo Financiero
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.35 times more return on investment than Grupo Financiero. However, NYSE Composite is 2.88 times less risky than Grupo Financiero. It trades about 0.21 of its potential returns per unit of risk. Grupo Financiero Banorte is currently generating about -0.07 per unit of risk. If you would invest 1,954,967 in NYSE Composite on August 27, 2024 and sell it today you would earn a total of 57,378 from holding NYSE Composite or generate 2.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Grupo Financiero Banorte
Performance |
| Timeline |
NYSE Composite and Grupo Financiero Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Grupo Financiero Banorte
Pair trading matchups for Grupo Financiero
Pair Trading with NYSE Composite and Grupo Financiero
The main advantage of trading using opposite NYSE Composite and Grupo Financiero positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Grupo Financiero 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 Grupo Financiero will offset losses from the drop in Grupo Financiero'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 |
| Grupo Financiero vs. Mission Valley Bancorp | Grupo Financiero vs. Lumbee Guaranty Bank | Grupo Financiero vs. Nmb Financial Corp | Grupo Financiero vs. Japan Post Holdings |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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