Correlation Between NYSE Composite and Greentown China
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Greentown China 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 Greentown China into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Greentown China Holdings, you can compare the effects of market volatilities on NYSE Composite and Greentown China 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 Greentown China. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Greentown China.
Diversification Opportunities for NYSE Composite and Greentown China
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between NYSE and Greentown is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Greentown China Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greentown China Holdings 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 Greentown China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greentown China Holdings has no effect on the direction of NYSE Composite i.e., NYSE Composite and Greentown China go up and down completely randomly.
Pair Corralation between NYSE Composite and Greentown China
Assuming the 90 days trading horizon NYSE Composite is expected to generate 2.98 times less return on investment than Greentown China. But when comparing it to its historical volatility, NYSE Composite is 6.17 times less risky than Greentown China. It trades about 0.08 of its potential returns per unit of risk. Greentown China Holdings is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 75.00 in Greentown China Holdings on August 30, 2024 and sell it today you would earn a total of 21.00 from holding Greentown China Holdings or generate 28.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 56.16% |
| Values | Daily Returns |
NYSE Composite vs. Greentown China Holdings
Performance |
| Timeline |
NYSE Composite and Greentown China Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Greentown China Holdings
Pair trading matchups for Greentown China
Pair Trading with NYSE Composite and Greentown China
The main advantage of trading using opposite NYSE Composite and Greentown China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Greentown China 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 Greentown China will offset losses from the drop in Greentown China's long position.| NYSE Composite vs. Sphere Entertainment Co | NYSE Composite vs. Weibo Corp | NYSE Composite vs. BCE Inc | NYSE Composite vs. Pinterest |
| Greentown China vs. Willamette Valley Vineyards | Greentown China vs. SNDL Inc | Greentown China vs. Vita Coco | Greentown China vs. PepsiCo |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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