Correlation Between NYSE Composite and Hollysys Automation
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Hollysys Automation 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 Hollysys Automation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Hollysys Automation Technologies, you can compare the effects of market volatilities on NYSE Composite and Hollysys Automation 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 Hollysys Automation. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Hollysys Automation.
Diversification Opportunities for NYSE Composite and Hollysys Automation
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between NYSE and Hollysys is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Hollysys Automation Technologi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hollysys Automation 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 Hollysys Automation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hollysys Automation has no effect on the direction of NYSE Composite i.e., NYSE Composite and Hollysys Automation go up and down completely randomly.
Pair Corralation between NYSE Composite and Hollysys Automation
Assuming the 90 days trading horizon NYSE Composite is expected to generate 2.11 times less return on investment than Hollysys Automation. But when comparing it to its historical volatility, NYSE Composite is 2.83 times less risky than Hollysys Automation. It trades about 0.11 of its potential returns per unit of risk. Hollysys Automation Technologies is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,778 in Hollysys Automation Technologies on August 31, 2024 and sell it today you would earn a total of 864.00 from holding Hollysys Automation Technologies or generate 48.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 76.2% |
| Values | Daily Returns |
NYSE Composite vs. Hollysys Automation Technologi
Performance |
| Timeline |
NYSE Composite and Hollysys Automation Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Hollysys Automation Technologies
Pair trading matchups for Hollysys Automation
Pair Trading with NYSE Composite and Hollysys Automation
The main advantage of trading using opposite NYSE Composite and Hollysys Automation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Hollysys Automation 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 Hollysys Automation will offset losses from the drop in Hollysys Automation's long position.| NYSE Composite vs. Nextplat Corp | NYSE Composite vs. Qualys Inc | NYSE Composite vs. Cadence Design Systems | NYSE Composite vs. Asure Software |
| Hollysys Automation vs. Huazhu Group | Hollysys Automation vs. VNET Group DRC | Hollysys Automation vs. Noah Holdings |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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