Correlation Between NYSE Composite and Eagle Small
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Eagle Small 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 Eagle Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Eagle Small Cap, you can compare the effects of market volatilities on NYSE Composite and Eagle Small 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 Eagle Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Eagle Small.
Diversification Opportunities for NYSE Composite and Eagle Small
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between NYSE and Eagle is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Eagle Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Small Cap 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 Eagle Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagle Small Cap has no effect on the direction of NYSE Composite i.e., NYSE Composite and Eagle Small go up and down completely randomly.
Pair Corralation between NYSE Composite and Eagle Small
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.71 times more return on investment than Eagle Small. However, NYSE Composite is 1.42 times less risky than Eagle Small. It trades about -0.09 of its potential returns per unit of risk. Eagle Small Cap is currently generating about -0.11 per unit of risk. If you would invest 1,942,158 in NYSE Composite on January 17, 2025 and sell it today you would lose (105,446) from holding NYSE Composite or give up 5.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Eagle Small Cap
Performance |
| Timeline |
NYSE Composite and Eagle Small Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Eagle Small Cap
Pair trading matchups for Eagle Small
Pair Trading with NYSE Composite and Eagle Small
The main advantage of trading using opposite NYSE Composite and Eagle Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Eagle Small 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 Eagle Small will offset losses from the drop in Eagle Small's long position.| NYSE Composite vs. Perseus Mining Limited | NYSE Composite vs. Copperbank Resources Corp | NYSE Composite vs. Catalyst Metals Limited | NYSE Composite vs. Life Time Group |
| Eagle Small vs. Chartwell Short Duration | Eagle Small vs. Carillon Chartwell Short | Eagle Small vs. Chartwell Short Duration | Eagle Small vs. Carillon Chartwell Short |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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