Correlation Between NYSE Composite and Granite Falls
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Granite Falls 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 Granite Falls into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Granite Falls Energy, you can compare the effects of market volatilities on NYSE Composite and Granite Falls 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 Granite Falls. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Granite Falls.
Diversification Opportunities for NYSE Composite and Granite Falls
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between NYSE and Granite is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Granite Falls Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Granite Falls Energy 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 Granite Falls. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Granite Falls Energy has no effect on the direction of NYSE Composite i.e., NYSE Composite and Granite Falls go up and down completely randomly.
Pair Corralation between NYSE Composite and Granite Falls
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.72 times more return on investment than Granite Falls. However, NYSE Composite is 1.39 times less risky than Granite Falls. It trades about 0.09 of its potential returns per unit of risk. Granite Falls Energy is currently generating about -0.06 per unit of risk. If you would invest 1,721,232 in NYSE Composite on November 3, 2024 and sell it today you would earn a total of 278,650 from holding NYSE Composite or generate 16.19% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
NYSE Composite vs. Granite Falls Energy
Performance |
Timeline |
NYSE Composite and Granite Falls Volatility Contrast
Predicted Return Density |
Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Granite Falls Energy
Pair trading matchups for Granite Falls
Pair Trading with NYSE Composite and Granite Falls
The main advantage of trading using opposite NYSE Composite and Granite Falls positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Granite Falls 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 Granite Falls will offset losses from the drop in Granite Falls' long position.NYSE Composite vs. Palomar Holdings | NYSE Composite vs. The Peoples Insurance | NYSE Composite vs. Radian Group | NYSE Composite vs. Nascent Wine |
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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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