Correlation Between NYSE Composite and Huber Capital
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Huber Capital 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 Huber Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Huber Capital Small, you can compare the effects of market volatilities on NYSE Composite and Huber Capital 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 Huber Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Huber Capital.
Diversification Opportunities for NYSE Composite and Huber Capital
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NYSE and Huber is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Huber Capital Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huber Capital Small 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 Huber Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huber Capital Small has no effect on the direction of NYSE Composite i.e., NYSE Composite and Huber Capital go up and down completely randomly.
Pair Corralation between NYSE Composite and Huber Capital
Assuming the 90 days trading horizon NYSE Composite is expected to generate 1.2 times less return on investment than Huber Capital. But when comparing it to its historical volatility, NYSE Composite is 1.85 times less risky than Huber Capital. It trades about 0.09 of its potential returns per unit of risk. Huber Capital Small is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2,458 in Huber Capital Small on November 3, 2024 and sell it today you would earn a total of 448.00 from holding Huber Capital Small or generate 18.23% 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. Huber Capital Small
Performance |
| Timeline |
NYSE Composite and Huber Capital Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Huber Capital Small
Pair trading matchups for Huber Capital
Pair Trading with NYSE Composite and Huber Capital
The main advantage of trading using opposite NYSE Composite and Huber Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Huber Capital 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 Huber Capital will offset losses from the drop in Huber Capital's long position.| NYSE Composite vs. Arrow Electronics | NYSE Composite vs. Cirmaker Technology | NYSE Composite vs. Zhihu Inc ADR | NYSE Composite vs. Weibo Corp |
| Huber Capital vs. Federated Emerging Market | Huber Capital vs. Growth Strategy Fund | Huber Capital vs. The Hartford Emerging | Huber Capital vs. Morgan Stanley Emerging |
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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