Correlation Between NYSE Composite and Corning Incorporated
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Corning Incorporated 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 Corning Incorporated into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Corning Incorporated, you can compare the effects of market volatilities on NYSE Composite and Corning Incorporated 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 Corning Incorporated. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Corning Incorporated.
Diversification Opportunities for NYSE Composite and Corning Incorporated
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between NYSE and Corning is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Corning Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corning Incorporated 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 Corning Incorporated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corning Incorporated has no effect on the direction of NYSE Composite i.e., NYSE Composite and Corning Incorporated go up and down completely randomly.
Pair Corralation between NYSE Composite and Corning Incorporated
Assuming the 90 days trading horizon NYSE Composite is expected to generate 1.79 times less return on investment than Corning Incorporated. But when comparing it to its historical volatility, NYSE Composite is 2.12 times less risky than Corning Incorporated. It trades about 0.08 of its potential returns per unit of risk. Corning Incorporated is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 3,141 in Corning Incorporated on August 24, 2024 and sell it today you would earn a total of 1,711 from holding Corning Incorporated or generate 54.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Corning Incorporated
Performance |
| Timeline |
NYSE Composite and Corning Incorporated Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Corning Incorporated
Pair trading matchups for Corning Incorporated
Pair Trading with NYSE Composite and Corning Incorporated
The main advantage of trading using opposite NYSE Composite and Corning Incorporated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Corning Incorporated 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 Corning Incorporated will offset losses from the drop in Corning Incorporated's long position.| NYSE Composite vs. Awilco Drilling PLC | NYSE Composite vs. AKITA Drilling | NYSE Composite vs. SunOpta | NYSE Composite vs. Delek Drilling |
| Corning Incorporated vs. OSI Systems | Corning Incorporated vs. Fabrinet | Corning Incorporated vs. Jabil Circuit | Corning Incorporated vs. Vicor |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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