Correlation Between NYSE Composite and GFG Resources
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and GFG Resources 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 GFG Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and GFG Resources, you can compare the effects of market volatilities on NYSE Composite and GFG Resources 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 GFG Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and GFG Resources.
Diversification Opportunities for NYSE Composite and GFG Resources
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NYSE and GFG is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and GFG Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GFG Resources 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 GFG Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GFG Resources has no effect on the direction of NYSE Composite i.e., NYSE Composite and GFG Resources go up and down completely randomly.
Pair Corralation between NYSE Composite and GFG Resources
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.15 times more return on investment than GFG Resources. However, NYSE Composite is 6.64 times less risky than GFG Resources. It trades about 0.19 of its potential returns per unit of risk. GFG Resources is currently generating about -0.22 per unit of risk. If you would invest 1,956,073 in NYSE Composite on August 25, 2024 and sell it today you would earn a total of 56,272 from holding NYSE Composite or generate 2.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. GFG Resources
Performance |
| Timeline |
NYSE Composite and GFG Resources Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
GFG Resources
Pair trading matchups for GFG Resources
Pair Trading with NYSE Composite and GFG Resources
The main advantage of trading using opposite NYSE Composite and GFG Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, GFG Resources 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 GFG Resources will offset losses from the drop in GFG Resources' long position.| NYSE Composite vs. Glacier Bancorp | NYSE Composite vs. LithiumBank Resources Corp | NYSE Composite vs. Stepstone Group | NYSE Composite vs. Pintec Technology Holdings |
| GFG Resources vs. Japan Gold Corp | GFG Resources vs. Robex Resources | GFG Resources vs. Rover Metals Corp | GFG Resources vs. Orefinders Resources |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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