Correlation Between NYSE Composite and Graph
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Graph 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 Graph into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and The Graph, you can compare the effects of market volatilities on NYSE Composite and Graph 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 Graph. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Graph.
Diversification Opportunities for NYSE Composite and Graph
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NYSE and Graph is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and The Graph in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Graph 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 Graph. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Graph has no effect on the direction of NYSE Composite i.e., NYSE Composite and Graph go up and down completely randomly.
Pair Corralation between NYSE Composite and Graph
Assuming the 90 days trading horizon NYSE Composite is expected to generate 15.63 times less return on investment than Graph. But when comparing it to its historical volatility, NYSE Composite is 9.52 times less risky than Graph. It trades about 0.29 of its potential returns per unit of risk. The Graph is currently generating about 0.47 of returns per unit of risk over similar time horizon. If you would invest 15.00 in The Graph on August 31, 2024 and sell it today you would earn a total of 12.00 from holding The Graph or generate 80.0% 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. The Graph
Performance |
| Timeline |
NYSE Composite and Graph Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
The Graph
Pair trading matchups for Graph
Pair Trading with NYSE Composite and Graph
The main advantage of trading using opposite NYSE Composite and Graph positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Graph 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 Graph will offset losses from the drop in Graph's long position.| NYSE Composite vs. Nextplat Corp | NYSE Composite vs. Qualys Inc | NYSE Composite vs. Cadence Design Systems | NYSE Composite vs. Asure Software |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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