Correlation Between NYSE Composite and Caravelle International
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Caravelle International 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 Caravelle International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Caravelle International Group, you can compare the effects of market volatilities on NYSE Composite and Caravelle International 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 Caravelle International. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Caravelle International.
Diversification Opportunities for NYSE Composite and Caravelle International
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NYSE and Caravelle is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Caravelle International Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caravelle International 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 Caravelle International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Caravelle International has no effect on the direction of NYSE Composite i.e., NYSE Composite and Caravelle International go up and down completely randomly.
Pair Corralation between NYSE Composite and Caravelle International
Assuming the 90 days trading horizon NYSE Composite is expected to generate 7.09 times less return on investment than Caravelle International. But when comparing it to its historical volatility, NYSE Composite is 12.18 times less risky than Caravelle International. It trades about 0.11 of its potential returns per unit of risk. Caravelle International Group is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 60.00 in Caravelle International Group on August 31, 2024 and sell it today you would earn a total of 70.00 from holding Caravelle International Group or generate 116.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Caravelle International Group
Performance |
| Timeline |
NYSE Composite and Caravelle International Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Caravelle International Group
Pair trading matchups for Caravelle International
Pair Trading with NYSE Composite and Caravelle International
The main advantage of trading using opposite NYSE Composite and Caravelle International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Caravelle International 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 Caravelle International will offset losses from the drop in Caravelle International's long position.| NYSE Composite vs. Nextplat Corp | NYSE Composite vs. Qualys Inc | NYSE Composite vs. Cadence Design Systems | NYSE Composite vs. Asure Software |
| Caravelle International vs. Oceanpal | Caravelle International vs. Safe Bulkers | Caravelle International vs. Safe Bulkers | Caravelle International vs. Safe Bulkers |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |