Correlation Between NYSE Composite and Global Partner
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Global Partner 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 Global Partner into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Global Partner Acq, you can compare the effects of market volatilities on NYSE Composite and Global Partner 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 Global Partner. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Global Partner.
Diversification Opportunities for NYSE Composite and Global Partner
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NYSE and Global is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Global Partner Acq in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Partner Acq 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 Global Partner. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Partner Acq has no effect on the direction of NYSE Composite i.e., NYSE Composite and Global Partner go up and down completely randomly.
Pair Corralation between NYSE Composite and Global Partner
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.28 times more return on investment than Global Partner. However, NYSE Composite is 3.51 times less risky than Global Partner. It trades about 0.14 of its potential returns per unit of risk. Global Partner Acq is currently generating about -0.21 per unit of risk. If you would invest 1,800,696 in NYSE Composite on September 1, 2024 and sell it today you would earn a total of 226,508 from holding NYSE Composite or generate 12.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 19.84% |
| Values | Daily Returns |
NYSE Composite vs. Global Partner Acq
Performance |
| Timeline |
NYSE Composite and Global Partner Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Global Partner Acq
Pair trading matchups for Global Partner
Pair Trading with NYSE Composite and Global Partner
The main advantage of trading using opposite NYSE Composite and Global Partner positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Global Partner 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 Global Partner will offset losses from the drop in Global Partner's long position.| NYSE Composite vs. Acumen Pharmaceuticals | NYSE Composite vs. Mind Medicine | NYSE Composite vs. NL Industries | NYSE Composite vs. Ecovyst |
| Global Partner vs. NH Foods Ltd | Global Partner vs. Diageo PLC ADR | Global Partner vs. Lifevantage | Global Partner vs. Grocery Outlet Holding |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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