Correlation Between NYSE Composite and Great Lakes
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Great Lakes 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 Great Lakes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Great Lakes Dredge, you can compare the effects of market volatilities on NYSE Composite and Great Lakes 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 Great Lakes. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Great Lakes.
Diversification Opportunities for NYSE Composite and Great Lakes
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between NYSE and Great is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Great Lakes Dredge in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great Lakes Dredge 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 Great Lakes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great Lakes Dredge has no effect on the direction of NYSE Composite i.e., NYSE Composite and Great Lakes go up and down completely randomly.
Pair Corralation between NYSE Composite and Great Lakes
Assuming the 90 days trading horizon NYSE Composite is expected to generate 2.04 times less return on investment than Great Lakes. But when comparing it to its historical volatility, NYSE Composite is 3.29 times less risky than Great Lakes. It trades about 0.13 of its potential returns per unit of risk. Great Lakes Dredge is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,190 in Great Lakes Dredge on August 24, 2024 and sell it today you would earn a total of 42.00 from holding Great Lakes Dredge or generate 3.53% 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. Great Lakes Dredge
Performance |
| Timeline |
NYSE Composite and Great Lakes Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Great Lakes Dredge
Pair trading matchups for Great Lakes
Pair Trading with NYSE Composite and Great Lakes
The main advantage of trading using opposite NYSE Composite and Great Lakes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Great Lakes 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 Great Lakes will offset losses from the drop in Great Lakes' long position.| NYSE Composite vs. Akanda Corp | NYSE Composite vs. Valneva SE ADR | NYSE Composite vs. Radcom | NYSE Composite vs. Western Digital |
| Great Lakes vs. Primoris Services | Great Lakes vs. Granite Construction Incorporated | Great Lakes vs. MYR Group | Great Lakes vs. Southland Holdings |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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