Correlation Between NYSE Composite and Horizon Active
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Horizon Active 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 Horizon Active into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Horizon Active Asset, you can compare the effects of market volatilities on NYSE Composite and Horizon Active 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 Horizon Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Horizon Active.
Diversification Opportunities for NYSE Composite and Horizon Active
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between NYSE and Horizon is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Horizon Active Asset in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Horizon Active Asset 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 Horizon Active. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Horizon Active Asset has no effect on the direction of NYSE Composite i.e., NYSE Composite and Horizon Active go up and down completely randomly.
Pair Corralation between NYSE Composite and Horizon Active
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.88 times more return on investment than Horizon Active. However, NYSE Composite is 1.13 times less risky than Horizon Active. It trades about 0.41 of its potential returns per unit of risk. Horizon Active Asset is currently generating about 0.25 per unit of risk. If you would invest 1,925,354 in NYSE Composite on September 2, 2024 and sell it today you would earn a total of 101,850 from holding NYSE Composite or generate 5.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Horizon Active Asset
Performance |
| Timeline |
NYSE Composite and Horizon Active Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Horizon Active Asset
Pair trading matchups for Horizon Active
Pair Trading with NYSE Composite and Horizon Active
The main advantage of trading using opposite NYSE Composite and Horizon Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Horizon Active 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 Horizon Active will offset losses from the drop in Horizon Active's long position.| NYSE Composite vs. Simon Property Group | NYSE Composite vs. Merit Medical Systems | NYSE Composite vs. Catalent | NYSE Composite vs. Titan Machinery |
| Horizon Active vs. Blackrock Moderate Prepared | Horizon Active vs. Moderately Aggressive Balanced | Horizon Active vs. Transamerica Cleartrack Retirement | Horizon Active vs. Lifestyle Ii Moderate |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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