Correlation Between NYSE Composite and Galp Energia
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Galp Energia 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 Galp Energia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Galp Energia SGPS, you can compare the effects of market volatilities on NYSE Composite and Galp Energia 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 Galp Energia. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Galp Energia.
Diversification Opportunities for NYSE Composite and Galp Energia
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between NYSE and Galp is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Galp Energia SGPS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Galp Energia SGPS 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 Galp Energia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Galp Energia SGPS has no effect on the direction of NYSE Composite i.e., NYSE Composite and Galp Energia go up and down completely randomly.
Pair Corralation between NYSE Composite and Galp Energia
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.25 times more return on investment than Galp Energia. However, NYSE Composite is 4.08 times less risky than Galp Energia. It trades about 0.24 of its potential returns per unit of risk. Galp Energia SGPS is currently generating about -0.23 per unit of risk. If you would invest 1,954,967 in NYSE Composite on August 27, 2024 and sell it today you would earn a total of 67,069 from holding NYSE Composite or generate 3.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Galp Energia SGPS
Performance |
| Timeline |
NYSE Composite and Galp Energia Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Galp Energia SGPS
Pair trading matchups for Galp Energia
Pair Trading with NYSE Composite and Galp Energia
The main advantage of trading using opposite NYSE Composite and Galp Energia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Galp Energia 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 Galp Energia will offset losses from the drop in Galp Energia's long position.| NYSE Composite vs. Hooker Furniture | NYSE Composite vs. Hudson Pacific Properties | NYSE Composite vs. Canlan Ice Sports | NYSE Composite vs. Boston Properties |
| Galp Energia vs. Equinor ASA ADR | Galp Energia vs. TotalEnergies SE ADR | Galp Energia vs. Ecopetrol SA ADR | Galp Energia vs. National Fuel Gas |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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