Correlation Between NYSE Composite and Golden Grail
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Golden Grail 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 Golden Grail into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Golden Grail Technology, you can compare the effects of market volatilities on NYSE Composite and Golden Grail 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 Golden Grail. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Golden Grail.
Diversification Opportunities for NYSE Composite and Golden Grail
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between NYSE and Golden is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Golden Grail Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Grail Technology 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 Golden Grail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Grail Technology has no effect on the direction of NYSE Composite i.e., NYSE Composite and Golden Grail go up and down completely randomly.
Pair Corralation between NYSE Composite and Golden Grail
Assuming the 90 days trading horizon NYSE Composite is expected to generate 15.22 times less return on investment than Golden Grail. But when comparing it to its historical volatility, NYSE Composite is 29.11 times less risky than Golden Grail. It trades about 0.13 of its potential returns per unit of risk. Golden Grail Technology is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 7.45 in Golden Grail Technology on August 29, 2024 and sell it today you would lose (3.37) from holding Golden Grail Technology or give up 45.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Golden Grail Technology
Performance |
| Timeline |
NYSE Composite and Golden Grail Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Golden Grail Technology
Pair trading matchups for Golden Grail
Pair Trading with NYSE Composite and Golden Grail
The main advantage of trading using opposite NYSE Composite and Golden Grail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Golden Grail 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 Golden Grail will offset losses from the drop in Golden Grail's long position.| NYSE Composite vs. Vita Coco | NYSE Composite vs. Franklin Wireless Corp | NYSE Composite vs. Ambev SA ADR | NYSE Composite vs. Toro Co |
| Golden Grail vs. Trivago NV | Golden Grail vs. YY Inc Class | Golden Grail vs. DouYu International Holdings | Golden Grail vs. Tencent Music Entertainment |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Global Correlations Find global opportunities by holding instruments from different markets |