Correlation Between NYSE Composite and Horizon Us
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Horizon Us 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 Us 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 Defensive Smmd, you can compare the effects of market volatilities on NYSE Composite and Horizon Us 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 Us. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Horizon Us.
Diversification Opportunities for NYSE Composite and Horizon Us
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between NYSE and Horizon is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Horizon Defensive Smmd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Horizon Defensive Smmd 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 Us. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Horizon Defensive Smmd has no effect on the direction of NYSE Composite i.e., NYSE Composite and Horizon Us go up and down completely randomly.
Pair Corralation between NYSE Composite and Horizon Us
Assuming the 90 days trading horizon NYSE Composite is expected to generate 1.62 times less return on investment than Horizon Us. But when comparing it to its historical volatility, NYSE Composite is 1.96 times less risky than Horizon Us. It trades about 0.41 of its potential returns per unit of risk. Horizon Defensive Smmd is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest 3,716 in Horizon Defensive Smmd on September 2, 2024 and sell it today you would earn a total of 320.00 from holding Horizon Defensive Smmd or generate 8.61% 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 Defensive Smmd
Performance |
| Timeline |
NYSE Composite and Horizon Us Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Horizon Defensive Smmd
Pair trading matchups for Horizon Us
Pair Trading with NYSE Composite and Horizon Us
The main advantage of trading using opposite NYSE Composite and Horizon Us positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Horizon Us 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 Us will offset losses from the drop in Horizon Us' long position.| NYSE Composite vs. Simon Property Group | NYSE Composite vs. Merit Medical Systems | NYSE Composite vs. Catalent | NYSE Composite vs. Titan Machinery |
| Horizon Us vs. Horizon Active Risk | Horizon Us vs. Horizon Active Risk | Horizon Us vs. Horizon Active Asset | Horizon Us vs. Horizon Defined Risk |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |