Correlation Between NYSE Composite and Power Global
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Power Global 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 Power Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Power Global Tactical, you can compare the effects of market volatilities on NYSE Composite and Power Global 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 Power Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Power Global.
Diversification Opportunities for NYSE Composite and Power Global
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between NYSE and Power is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Power Global Tactical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Power Global Tactical 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 Power Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Power Global Tactical has no effect on the direction of NYSE Composite i.e., NYSE Composite and Power Global go up and down completely randomly.
Pair Corralation between NYSE Composite and Power Global
Assuming the 90 days trading horizon NYSE Composite is expected to generate 1.63 times more return on investment than Power Global. However, NYSE Composite is 1.63 times more volatile than Power Global Tactical. It trades about 0.41 of its potential returns per unit of risk. Power Global Tactical is currently generating about 0.39 per unit of risk. If you would invest 1,925,354 in NYSE Composite on September 2, 2024 and sell it today you would earn a total of 101,850 from holding NYSE Composite or generate 5.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Power Global Tactical
Performance |
| Timeline |
NYSE Composite and Power Global Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Power Global Tactical
Pair trading matchups for Power Global
Pair Trading with NYSE Composite and Power Global
The main advantage of trading using opposite NYSE Composite and Power Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Power Global 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 Power Global will offset losses from the drop in Power Global's long position.| NYSE Composite vs. Simon Property Group | NYSE Composite vs. Merit Medical Systems | NYSE Composite vs. Catalent | NYSE Composite vs. Titan Machinery |
| Power Global vs. Power Floating Rate | Power Global vs. Power Floating Rate | Power Global vs. Federated Hermes Conservative | Power Global vs. Vanguard Growth Index |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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