Correlation Between NYSE Composite and Graphite One
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Graphite One 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 Graphite One into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Graphite One, you can compare the effects of market volatilities on NYSE Composite and Graphite One 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 Graphite One. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Graphite One.
Diversification Opportunities for NYSE Composite and Graphite One
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NYSE and Graphite is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Graphite One in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Graphite One 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 Graphite One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Graphite One has no effect on the direction of NYSE Composite i.e., NYSE Composite and Graphite One go up and down completely randomly.
Pair Corralation between NYSE Composite and Graphite One
Assuming the 90 days trading horizon NYSE Composite is expected to generate 6.32 times less return on investment than Graphite One. But when comparing it to its historical volatility, NYSE Composite is 6.97 times less risky than Graphite One. It trades about 0.32 of its potential returns per unit of risk. Graphite One is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 48.00 in Graphite One on November 9, 2024 and sell it today you would earn a total of 15.00 from holding Graphite One or generate 31.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Graphite One
Performance |
| Timeline |
NYSE Composite and Graphite One Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Graphite One
Pair trading matchups for Graphite One
Pair Trading with NYSE Composite and Graphite One
The main advantage of trading using opposite NYSE Composite and Graphite One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Graphite One 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 Graphite One will offset losses from the drop in Graphite One's long position.| NYSE Composite vs. Integrated Media Technology | NYSE Composite vs. Custom Truck One | NYSE Composite vs. Funko Inc | NYSE Composite vs. Multi Ways Holdings |
| Graphite One vs. Mason Graphite | Graphite One vs. Northern Graphite | Graphite One vs. Lomiko Metals | Graphite One vs. IGO Limited |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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