Correlation Between NYSE Composite and Canoo
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Canoo 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 Canoo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Canoo Inc, you can compare the effects of market volatilities on NYSE Composite and Canoo 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 Canoo. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Canoo.
Diversification Opportunities for NYSE Composite and Canoo
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between NYSE and Canoo is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Canoo Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canoo Inc 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 Canoo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canoo Inc has no effect on the direction of NYSE Composite i.e., NYSE Composite and Canoo go up and down completely randomly.
Pair Corralation between NYSE Composite and Canoo
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.05 times more return on investment than Canoo. However, NYSE Composite is 21.44 times less risky than Canoo. It trades about 0.24 of its potential returns per unit of risk. Canoo Inc is currently generating about -0.18 per unit of risk. If you would invest 1,954,967 in NYSE Composite on August 28, 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. Canoo Inc
Performance |
| Timeline |
NYSE Composite and Canoo Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Canoo Inc
Pair trading matchups for Canoo
Pair Trading with NYSE Composite and Canoo
The main advantage of trading using opposite NYSE Composite and Canoo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Canoo 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 Canoo will offset losses from the drop in Canoo'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 |
| Canoo vs. Lucid Group | Canoo vs. Rivian Automotive | Canoo vs. Polestar Automotive Holding | Canoo vs. Mullen Automotive |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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