Correlation Between NYSE Composite and STRATS SM
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and STRATS SM 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 STRATS SM into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and STRATS SM Trust, you can compare the effects of market volatilities on NYSE Composite and STRATS SM 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 STRATS SM. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and STRATS SM.
Diversification Opportunities for NYSE Composite and STRATS SM
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between NYSE and STRATS is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and STRATS SM Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STRATS SM Trust 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 STRATS SM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STRATS SM Trust has no effect on the direction of NYSE Composite i.e., NYSE Composite and STRATS SM go up and down completely randomly.
Pair Corralation between NYSE Composite and STRATS SM
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.57 times more return on investment than STRATS SM. However, NYSE Composite is 1.77 times less risky than STRATS SM. It trades about 0.13 of its potential returns per unit of risk. STRATS SM Trust is currently generating about 0.02 per unit of risk. If you would invest 1,781,726 in NYSE Composite on September 12, 2024 and sell it today you would earn a total of 206,464 from holding NYSE Composite or generate 11.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.58% |
| Values | Daily Returns |
NYSE Composite vs. STRATS SM Trust
Performance |
| Timeline |
NYSE Composite and STRATS SM Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
STRATS SM Trust
Pair trading matchups for STRATS SM
Pair Trading with NYSE Composite and STRATS SM
The main advantage of trading using opposite NYSE Composite and STRATS SM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, STRATS SM 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 STRATS SM will offset losses from the drop in STRATS SM's long position.| NYSE Composite vs. Teleflex Incorporated | NYSE Composite vs. Victorias Secret Co | NYSE Composite vs. Under Armour C | NYSE Composite vs. Steven Madden |
| STRATS SM vs. Freedom Bank of | STRATS SM vs. HUMANA INC | STRATS SM vs. Barloworld Ltd ADR | STRATS SM vs. Morningstar Unconstrained Allocation |
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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