Correlation Between NYSE Composite and Golden Heaven
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Golden Heaven 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 Golden Heaven into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Golden Heaven Group, you can compare the effects of market volatilities on NYSE Composite and Golden Heaven 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 Golden Heaven. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Golden Heaven.
Diversification Opportunities for NYSE Composite and Golden Heaven
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between NYSE and Golden is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Golden Heaven Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Heaven Group 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 Golden Heaven. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Heaven Group has no effect on the direction of NYSE Composite i.e., NYSE Composite and Golden Heaven go up and down completely randomly.
Pair Corralation between NYSE Composite and Golden Heaven
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.08 times more return on investment than Golden Heaven. However, NYSE Composite is 12.9 times less risky than Golden Heaven. It trades about 0.42 of its potential returns per unit of risk. Golden Heaven Group is currently generating about -0.12 per unit of risk. If you would invest 1,923,895 in NYSE Composite on September 1, 2024 and sell it today you would earn a total of 103,309 from holding NYSE Composite or generate 5.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Golden Heaven Group
Performance |
| Timeline |
NYSE Composite and Golden Heaven Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Golden Heaven Group
Pair trading matchups for Golden Heaven
Pair Trading with NYSE Composite and Golden Heaven
The main advantage of trading using opposite NYSE Composite and Golden Heaven positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Golden Heaven 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 Golden Heaven will offset losses from the drop in Golden Heaven's long position.| NYSE Composite vs. Acumen Pharmaceuticals | NYSE Composite vs. Mind Medicine | NYSE Composite vs. NL Industries | NYSE Composite vs. Ecovyst |
| Golden Heaven vs. Cimpress NV | Golden Heaven vs. Suburban Propane Partners | Golden Heaven vs. WiMi Hologram Cloud | Golden Heaven vs. Vistra Energy Corp |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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