Correlation Between NYSE Composite and Catalyst/smh High
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Catalyst/smh High 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 Catalyst/smh High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Catalystsmh High Income, you can compare the effects of market volatilities on NYSE Composite and Catalyst/smh High 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 Catalyst/smh High. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Catalyst/smh High.
Diversification Opportunities for NYSE Composite and Catalyst/smh High
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between NYSE and Catalyst/smh is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Catalystsmh High Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalystsmh High Income 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 Catalyst/smh High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalystsmh High Income has no effect on the direction of NYSE Composite i.e., NYSE Composite and Catalyst/smh High go up and down completely randomly.
Pair Corralation between NYSE Composite and Catalyst/smh High
Assuming the 90 days trading horizon NYSE Composite is expected to under-perform the Catalyst/smh High. In addition to that, NYSE Composite is 2.34 times more volatile than Catalystsmh High Income. It trades about -0.05 of its total potential returns per unit of risk. Catalystsmh High Income is currently generating about 0.0 per unit of volatility. If you would invest 374.00 in Catalystsmh High Income on November 27, 2024 and sell it today you would earn a total of 0.00 from holding Catalystsmh High Income or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Catalystsmh High Income
Performance |
| Timeline |
NYSE Composite and Catalyst/smh High Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Catalystsmh High Income
Pair trading matchups for Catalyst/smh High
Pair Trading with NYSE Composite and Catalyst/smh High
The main advantage of trading using opposite NYSE Composite and Catalyst/smh High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Catalyst/smh High 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 Catalyst/smh High will offset losses from the drop in Catalyst/smh High's long position.| NYSE Composite vs. Unum Group | NYSE Composite vs. Palomar Holdings | NYSE Composite vs. Fidelity National Financial | NYSE Composite vs. ZW Data Action |
| Catalyst/smh High vs. Dreyfus Technology Growth | Catalyst/smh High vs. Towpath Technology | Catalyst/smh High vs. Goldman Sachs Technology | Catalyst/smh High vs. Global Technology Portfolio |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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