Correlation Between NYSE Composite and Gouverneur Bancorp
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Gouverneur Bancorp 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 Gouverneur Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Gouverneur Bancorp, you can compare the effects of market volatilities on NYSE Composite and Gouverneur Bancorp 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 Gouverneur Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Gouverneur Bancorp.
Diversification Opportunities for NYSE Composite and Gouverneur Bancorp
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NYSE and Gouverneur is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Gouverneur Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gouverneur Bancorp 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 Gouverneur Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gouverneur Bancorp has no effect on the direction of NYSE Composite i.e., NYSE Composite and Gouverneur Bancorp go up and down completely randomly.
Pair Corralation between NYSE Composite and Gouverneur Bancorp
Assuming the 90 days trading horizon NYSE Composite is expected to generate 2.08 times less return on investment than Gouverneur Bancorp. But when comparing it to its historical volatility, NYSE Composite is 2.71 times less risky than Gouverneur Bancorp. It trades about 0.14 of its potential returns per unit of risk. Gouverneur Bancorp is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 970.00 in Gouverneur Bancorp on September 1, 2024 and sell it today you would earn a total of 251.00 from holding Gouverneur Bancorp or generate 25.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Gouverneur Bancorp
Performance |
| Timeline |
NYSE Composite and Gouverneur Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Gouverneur Bancorp
Pair trading matchups for Gouverneur Bancorp
Pair Trading with NYSE Composite and Gouverneur Bancorp
The main advantage of trading using opposite NYSE Composite and Gouverneur Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Gouverneur Bancorp 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 Gouverneur Bancorp will offset losses from the drop in Gouverneur Bancorp's long position.| NYSE Composite vs. Acumen Pharmaceuticals | NYSE Composite vs. Mind Medicine | NYSE Composite vs. NL Industries | NYSE Composite vs. Ecovyst |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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